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Evidence of a strong relationship between IKEA and Tax havens: IKEA Denmark sends millions to secret fund in tax havens


  

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Monday, 12 September 2011
IKEA Denmark has kept Dkr750 million from the tax authority there. The money is reported to have been channelled to secret funds in Liechtenstein, Danish media reports on Monday.

First revealed by Swedish television investigative news some months ago that Ikeas, Ingvar Kamprad had stashed profits of around Skr100 billion in the hitherto secret Foundation Interogo Foundation in tax haven Liechtenstein. Now, therefore is more revelations that the company’s relations with tax haven has strengthened and gains from Denmark which would have been taxed there has instead been ferried out of the Danish operations.

The newspaper, Poliken has examined the internal accounts of the Ikea Group, and deduced that the furniture giant since the mid-1980s has funnelled large sums of money to Lichtenstein via a system of subsidiaries in the Netherlands and Luxembourg.

Altogether, the amount, about Dkr750 million has been played out of the sight of the tax authority in Denmark without them observing, writes Politiken. For the Danish Treasury that means a shortfall of around Dkr188 million.

“It is not acceptable, all companies operating in the country will also pay tax in Denmark,” says Socialist People's Party, SF, spokesperson for econmics, Jesper Petersen.

According to the expert and tax accountant Christen Amby, tax advisers to the SF party, Ikea’s approach are inconsistent with the current Danish tax laws.

“More than a foundation in Lichtenstein develops Ikea self-concept and its name and must be charged to 25 percent in taxes for all these years, he says to Politiken.

The techniuw IKEA used is that after taxes are approved in Denmark, 25 percent if further reduced from the approved taxes to be paid to the franchise in Liechtenstein as royalty to the foundation that owns the IKEA name.
Since this amount actually ends up in Liechtenstein, where taxes are not paid, the cash ends in Ikea’s pocket.

The Danish Tax office Head Michael Carlsen, according to Politiken, confirms that Denmark charged 25 percent withholding tax on royalties that have headed for Liechtenstein.
It is not clear if IKEA has done anything wrong here as it looks like the company has sophisticated tax management systems – something Swedish television identified recently when they first open up the company’s practice.
It is also likely that the government might not over work the issue given that IKEA is a big direct and in direct employer in the country and has a good rapport with the people.
Scancomark.se Team


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