Ikea: Green MEPs denounce the tax schemes of the Swedish giant – Le Monde

Le Monde | 02/12/2016 at 18:20 • Updated 02/13/2016 at 20:35 | By Cécile Ducourtieux (Brussels, European Office)

Maintain maximum political pressure on European states and the Brussels Commission for the fight against fraud and tax evasion does not falter. This is the meaning of the report denouncing practices Ikea made public on Friday, February 12 by Green MEPs. The European Commission announced that it took “note” of the document and promised to “study in detail” .

Swedish giant Practices cheap furniture were often denounced by the media in recent years, but the Greens want to go further and in more detail. To do this, they are assistant to the services of an independent researcher based in the United States, Marc Auerbach, co-author, in June 2015, a report on the techniques of evasion of Walmart.

to believe this study, Ikea would have escaped largely to tax in recent years, thanks to two foundations, one in Lichtenstein, the other in the Netherlands. Be a shortfall of about 1 billion euros for European fiscs between 2009 and 2014. These arrangements would have lost the single year 2014, EUR 35 million in Germany, 24 million in France, and 10 million to Sweden.

How does this well established system of tax evasion? In 1982, Ingvar Kamprad, founder of Ikea, divided his company (over 33 billion euros in revenues and approximately 172,000 employees) in two separate legal entities: Inter Ikea Group, controlled by a foundation based in Lichtenstein, Interogo Foundation; and Ikea Group, controlled by a Dutch foundation, Stichting INGKA

Read also:. The ace of tax optimization on the grill

The study focused on the case of Inter Ikea Group, a Netherlands holding company with the Ikea brand. Each Ikea reverse to that entity, in “royalties”, the equivalent of 3% of sales, in respect of the use of the Ikea brand. This allows these stores to reduce their taxable income in the countries concerned. And also, the Dutch entity hardly pay taxes, the Netherlands are known for their generous legislation on the non-taxation of royalties.

“Acrobatics” accounting

the Batavian entity to buy the brand Ikea is indebted in 2012 with a Luxembourg subsidiary, and returns him much of the royalties in the form of interest used to pay back ready. However, these interests are not taxed at their “output” of the Netherlands. Furthermore, in Luxembourg, there is a “ruling” (an agreement between Ikea and the Grand Duchy of tax), allowing Inter Ikea Group of being taxed at 0.06% of its profits. Finally, dividends are paid to the Luxembourg subsidiary to the foundation of the Lichtenstein. Now it happens that in this notorious tax havens, subsidiary dividends from abroad are not taxed …

What the Greens want to point with this shining example? That the recent proposals of the European Commission to fight against the most abusive tax schemes would not allow to end all the “tricks” of Ikea accounting.

Yet Brussels has been busy since ‘Luxleaks scandal broke in November 2014, which indirectly affected its president, Jean-Claude Juncker, Prime Minister of Luxembourg for nearly nineteen years. Commissioner for the record, the French Pierre Moscovici, has managed to pass by the 28 Member States in October 2015, the principle of automatic and compulsory transmission of “rulings” between fiscs Member States.

and the end of January, Mr Moscovici has proposed legislation requiring multinational companies to transfer their profits to all fiscs countries where they operate, as well as a directive to prevent abuse of the devices strongly “défiscalisants” (intercompany loans, deduction of interest, etc.). Devices which, added or diverted from their purpose, allowing multinationals being imposed anywhere.

The Greens are calling for transparency in all directions, very effective, they say, to end the most practical “boundaries”. The “rulings” should be made public at a much larger scale, not only transmitted between national fiscs. Ditto for the profits made country by country, which should be included in the annual multinational relationships.

MEPs will continue to exert political pressure through the Special Commission TAX European Parliament, set up in in February 2015, just after Luxleaks, and they got an extension for six months in November. They hope to win especially the hearing of the Dutch Minister of Finance (and President of the Eurogroup), Jeroen Dijsselbloem.