Commission opens investigation into Ikea's tax arrangements in the Netherlands

Brussels has launched an investigation this Monday into Ikea’s Dutch tax deals as part of its ongoing crackdown on corporate tax evasion.

The European Commission said it was looking into the tax treatment that Inter Ikea (Dutch-based unit of the retail giant) received in the Netherlands, amid suspicions that for years the company had received special treatment that allowed it to pay less taxes, giving it an unfair advantage versus its competitors.

EU antitrust commissioner Margrethe Vestager said: "All companies, big or small, multinational or not, should pay their fair share of tax."

"Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere," she added.

The tax arrangements in question allegedly helped Ikea sidestep nearly €1bn in EU taxes from 2009 to 2014, according to a report published by the Greens in the European Parliament.

It was alleged that the company had established two corporate groups within a web of companies domiciled in the Netherlands, Liechtenstein and Luxembourg, so that it could move profits and funds, thus obtaining benefits from special tax schemes.

Thus, Inter Ikea was said to have been allowed by the Dutch government to pay a licence fee to another Ikea unit in Luxembourg, shunting revenue to a jurisdiction where it would not be taxed.

Monday's news might prove an embarrassment for European Commission President Jean-Claude Juncker, the prime minister of Luxembourg at the time the tax deals were made.

Following legislative changes in Luxembourg in 2011, Inter Ikea changed its strategy and arranged a loan with the Ikea unit in Liechtenstein, shifting revenues yet again.

Nevertheless, it was not the first time that an open investigation had been conducted into a large multinational's tax dealings.

On that note, Ms Vestager said: "Our work isn’t over yet [...] we will open investigations whenever there are indications that state aid has been granted."