We all know how simple IKEA’s instructions for constructing its flat pack furniture are. At the other end of the scale of simplicity, in fact, at the level of preposterously complex, is IKEA’s corporate structure. Founder Ingvar Kamprad has published claims that the company is open about its structure, and has published what he says is the full extent of the web of ownership. However, a report from earlier this year by the Greens/EFA party in the EU shows that his picture of the corporation’s structure does not even come close to the actual web.
One of the conclusions of the report, IKEA: flat pack tax avoidance, Taaks Avoyd, was to ask the EC to open an investigation into IKEA’s tax practices. Importantly, the report does not claim that IKEA is breaking the law. In contrast, it is complying with regulations, but, the report claims, current EU tax rules and those of individual countries in the EU, facilitate tax avoidance to an enormous extent. The EC has responded by opening an in-depth investigation into the Netherlands’ tax treatment of Inter IKEA on 18 December this year. It’s a start, but there are plenty of other IKEA groups and subsidiaries domiciled in Liechtenstein, Belgium, Luxembourg, Curacao, France, Norway, and other jurisdictions. In fact, the EC is only investigating one of the two main IKEA entities, Inter IKEA. The IKEA Group, the other main entity is not yet under investigation. The report names, in addition, a bewildering array of entities. The Greens’ report is 34, double-columned pages long, with a lot of diagrams, and this article can only touch on some of the complexities of IKEA’s tax avoidance.
