Furniture retail giant IKEA and its founder Ingvar Kamprad in particular have long been known for their ability to bring in revenue and save the money they make. But now, according to The New York Times, the corporation is being investigated in Europe because of suspicion that it’s benefited from unfair tax advantages in the countries where it operates.
IKEA is one of the world’s most successful businesses, with reported revenues of about 36.3 billion euros ($43 billion) for this past fiscal year. But its finances are also notoriously opaque, and authorities have an inkling about why. The European Commission, an investigative body within the European Union, is concerned that IKEA may have avoided an estimated 1 billion euros in taxes between 2009 and 2014 by stashing money in a trust in the Netherlands.
Kamprad has insisted that he’s done nothing wrong, maintaining that he keeps money abroad simply because he wants to maximize financial independence.
“Already back in the ’60s, I started to look for ways to ensure IKEA could be kept as a private company to secure true financial independence and thus the freedom to have a long-term view on our investments and in business development,” he said in a statement. “I have often referred to that as securing ‘eternal life’ for IKEA.”
IKEA is far from the only company currenly facing scrutiny from European officials. Other major brands—including Starbucks, Apple, Facebook and Amazon—also have sophisticated tax strategies that involve keeping money abroad in countries such as Ireland, the Netherlands and other EU member nations. Margrethe Vestager, the top antitrust regulator in Europe, brought a similar case against Starbucks in 2015.
Vestager’s strategy is a multi-pronged one, Not only does she go after major companies like IKEA and Starbucks directly, but she also employs a separate legal strategy of targeting countries that may be providing state-sponsored tax aid to such companies.
“All companies, big or small, multinational or not, should pay their fair share of tax,” Vestager said in a statement.
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