Ikea Being Investigated for Dodging Taxes of More than $1.1 Billion
According to a Green party report in the European Parliament, Ikea has been accused of tax dodging for as much as 1 billion euros or $1.1 billion in its taxes from 2009 to 2014.
The political organization has accused the retailer of a large scale avoidance of taxes.
In the report, Ikea was accused of deliberately shifting some money from its store across Europe through a Netherlands subsidiary. From that point, they would end with money untaxed in Luxembourg or Liechtenstein.
The top regulator in the European Union, the European Commission, said it would study this report.
Ikea defended itself against the news saying it pays its taxes in complete compliance with international and national tax regulations and rules.
The report said that for just 2014 the estimated tax avoidance led to as many 35 million euros or $39 million of tax revenues that were missing in Germany, up to 24 million euros or $26 million for France and as many as 11.6 million or $13 million in the United Kingdom.
Countries such as Belgium, Spain and Sweden are more likely losing as much as 7.5 million to 10 million euros or between $8.5 million and $11.2 million, claimed the report.
Profit shifting has become a common practice by multinational companies that operate across Europe. They establish their headquarters in the low tax countries like Luxembourg or Ireland and then they funnel the majority of their profit earned in Europe through those two countries.
The EU is attempting to crack down on the this type of corporate tax avoidance while aiming to shut the legal loopholes which allow companies to pay as few taxes as possible.
Under new regulations, countries can now charge them corporate taxes even though the companies transfer profits elsewhere.