EU Regulators Open Probe Into Ikea’s Taxes

Ikea is the latest company ensnared in the European Union’s sprawling tax probes as regulators look at whether the retailer’s revenue deals in the Netherlands allowed it to avoid hundreds of millions of euros of taxes.

The tax breaks may have given Inter Ikea Group, which operated the Swedish furniture maker’s franchise business, an unfair advantage over rivals, the European Commission said in an emailed statement Monday. It will probe a 2006 deal on how Ikea calculates a license fee paid by a Dutch unit to a Luxembourg branch where it was exempted from tax. The EU will also look at a 2011 ruling on how the Dutch company paid tax on payments to a Liechtenstein unit.

A probe into Ikea, one of Europe’s best-known brands, may ease criticism Vestager has received for focusing on how U.S. companies reduce taxes. She’s already ordered Apple Inc., Starbucks Corp. and Inc. to repay tax while a probe of McDonald’s Corp. is continuing. She’s also suing Ireland for delays in reclaiming about 13 billions euros ($15.3 billion) from Apple during the appeal process.

Ikea may have avoided at least 1 billion euros ($1.2 billion) in tax from income from stores from 2009 to 2014, according to a report by Greens/EFA lawmakers submitted to the EU last year. EU Competition Commissioner Margrethe Vestager said in an interview last year that the EU was vetting those claims.

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SOURCE: Bloomberg, Aoife White and Stephanie Bodoni