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EU Expands Investigation Into Dutch Taxation Of IKEA

by Ulrika Lomas, Tax-News.com, Brussels

15 May 2020


The European Commission has extended the scope of its in-depth investigation into the Dutch tax treatment of Inter IKEA.

In December 2017, the Commission opened an investigation into two Dutch tax rulings in favor of IKEA's Dutch subsidy, Inter IKEA Systems, issued in 2006 and 2011. The Commission was concerned that these rulings may have allowed Inter IKEA to pay less tax and given the group an unfair advantage over other companies, in breach of EU state aid rules.

On April 30, 2020, the Commission announced that it has extended the scope of the investigation.

In 2017, the Commission provisionally concluded that, in relation to the 2011 tax ruling, the transfer price of the IKEA intellectual property rights might be too high, enabling Inter IKEA to pay less tax. The Commission has now said that, since the opening of the investigation, some of the facts and assumptions underlying the 2011 ruling have changed.

The Commission pointed in particular to the fact that Inter IKEA has started to amortize the IKEA intellectual property rights. It said that the Dutch tax authorities have confirmed the deduction of such amortization in their annual tax assessments of Inter IKEA's tax returns.

The Commission has therefore extended the scope of its investigation to cover the annual tax assessments. Its aim will be to examine whether the deduction of the amortization of the IKEA intellectual property rights provided an advantage to Inter IKEA, in breach of EU state aid rules.

TAGS: compliance | tax | European Commission | tax compliance | Netherlands | tax avoidance | intellectual property | tax authority | transfer pricing | European Union (EU) | Europe | Tax | Tax Evasion | BEPS

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