After Google, IKEA Has Been Accused of Tax Dodging Up To €1 billion
Members of The European Parliament (MEP) have pledged on Saturday to study a report by the Green Party that accuses IKEA for tax dodging. The Swedish furniture maker has been accused of evading tax up to €1 billion ($1.13 billion/ £776 million) between 2009 and 2014.
The report published over the weekend reveals that the furniture retailer has deliberately laundered money from its stores around Europe through a subsidiary in Netherlands. The siphoned money is believed to end up as untaxed in Lichtenstein or Luxembourg, reports CNN Money.
Netherlands, Luxembourg and Belgium have reportedly aided IKEA with the large scale tax avoidance over the past six years. The investigation report has been commissioned by Greens/ European Free Alliance, the political group comprising of green, regionalist and nationalist political parties. The report appears to be the latest among a series of investigations conducted during the last 10 years, reports International Business Times.
However, IKEA Group claims to be fully committed towards managing operations in a responsible and sustainable manner. It pays taxes in full compliance with the local and international rules and regulations. The retail furniture giant is committed to further developing business in Europe while continuing dialogue on developing a harmonized and transparent tax system, narrates The Guardian.
IKEA Group possesses no knowledge on the investigation report and hence expresses inability to comment. It has claimed paying corporate tax of €822 million at an effective rate of 19%. Apart from this, the group has paid an additional €700 million by way of other taxes like property tax.
The report estimates that the tax dodging has led to €35 million ($39 million) of missing tax revenues in only in Germany. During the same period, France has been dodged €24 million and the UK €11.6 million. Sweden, Spain and Belgium have lost between €7.5 million and €10 million, according to the investigation report.
The multinational companies operating all over Europe siphons off profit as a common practice. The multinationals usually establish headquarters in low tax countries like Ireland or Luxembourg. Funneling most of the European profits using the tax loophole appears to be the most common phenomenon in tax evasion.
The Green party's claim has been produced amid rising public outrage about tax dodging by multinational companies. In similar but separate incident, Google has negotiated paying back taxes of £130 million ($185.4 million/ €172 million) to the UK followed by an investigation by the tax authority. However, the too low sum of tax settlement has drawn a barrage of criticism.
Last month, Google has negotiated with the UK tax authority to settle a tax claim though initially rejected the allegations. The settlement with payment of back taxes proves the fact that tax dodging is common practice for the multinational companies. Green Party has accused IKEA for dodging tax up to €1 billion ($1.13 billion/ £776 million). IKEA has rejected the claim as usual and MEP has taken the allegation into cognizance.