Ikea accused of €1bn tax evasion in Europe

The Ikea group has been accused of evading taxes in Europe. Members of the European Parliament (MEP) have claimed that the Swedish furniture retailer had failed to pay at least €1bn (£776m, $1.13bn) over the past six years, following which they have asked for a probe to check if Ikea's "reprehensible" tax arrangements had breached the rules laid down by the state.

The MEPs said they had undertaken an investigation, which had revealed that the Netherlands, Luxembourg and Belgium had helped Ikea with the "large scale [tax] avoidance". They alleged that the investigation also showed that Ikea owned a few companies through secretive foundations in the Netherlands and Liechtenstein.

This investigation report commissioned by the Greens/European Free Alliance, the political group in the European Parliament containing green, regionalist and nationalist political parties, is the latest in a series of investigations Ikea has been subjected to, for the last 10 years.

The Leiden, Netherlands headquartered company has received €14.3bn by way of royalties from Ikea stores around the world. The report claims that the group avoided paying tax on 84% of this royalty income, adding, however, that a "definitive" figure of the exact amount of tax saved by Ikea could not be calculated because of lack of data in the public domain.

Molly Scott Cato, spokesperson for the Green tax policy said: "Ikea has deliberately created this multilayer company model to enable it to shift hundreds of millions of euros through several EU tax havens, with Liechtenstein the end destination for much of this, to make sure it remains untaxed."

The Ikea group, in response, said it had not seen the report and hence could not comment. It, however, said that it had paid corporate taxes to the tune of €822m at an effective rate of 19%. The group added that apart from this, it had paid an additional €700m by way of other taxes such as property tax, according to the Financial Times.

"The Ikea group pays taxes in accordance with laws and regulations, wherever we are present as retailer, manufacturer or in any other role. We have a strong commitment to manage our operations in a responsible way and to contribute to the societies where we operate," the group said.