Tag: Ikea

Spain vs Ikea, March 2019, Audiencia Nacional (TEAC), Case No SAN 1072/2019

Spain vs Ikea, March 2019, Audiencia Nacional (TEAC), Case No SAN 1072/2019

The tax administration had issued an adjustment to the taxable profit of IKEA’s subsidiary in Spain considering that taxable profit in years 2007, 2008, and 2009 had not been determined in accordance with the arm’s length principle. In 2007 taxable profits had been below the interquartile range and in 2008 and 2009 taxable profits had been within the interquartile range but below the median. In all years taxable profits had been adjusted to the median found in the benchmark study. With respect to 2007 where the profit had been outside the interquartile range, the court held that profits should be adjusted to the lower quartile instead of the median, as argued by the tax administration. The tax administration had not demonstrated comparability defect in the comparability study provided by the taxpayer that justified using the median in the assessment of the arm’s length profit. For 2008 and 2009 where the taxable profit had been within the interquartile range – but ... Continue to full case
European Commission vs. Netherlands and IKEA, Dec. 2017

European Commission vs. Netherlands and IKEA, Dec. 2017

The European Commission has opened an in-depth investigation into the Netherlands’ tax treatment of Inter IKEA, one of the two groups operating the IKEA business. The Commission has concerns that two Dutch tax rulings may have allowed Inter IKEA to pay less tax and given them an unfair advantage over other companies, in breach of EU State aid rules. Commissioner Margrethe Vestager in charge of competition policy 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. We will now carefully investigate the Netherlands’ tax treatment of Inter IKEA.” In the early 1980s, the IKEA business model changed into a franchising model. Since then, it has been the Inter IKEA group that operates the franchise business of IKEA, using the “IKEA franchise concept”. What this means more concretely is that Inter IKEA does not own the ... Continue to full case

France vs IKEA, May 2017, CAA of Versailles, No 15VE00571

The French tax authorities had issued an assessment for the fiscal years 2002, 2003 and 2004 related to royalty fees paid by IKEA France to foreign group companies. It was claimed that the royalty fees paid were exessive. The Court reject the position of the authorities. It had not been proven that the fees paid by IKEA France to foreign IKEA companies were excessive based on the arm’s length principle and on Article 57 of the CGI. The Court stresses the irrelevance of the comparables presented by the administration: “Considering that the nine trademarks used as comparables by the administration relate to the French market, the furniture sector and distribution methods similar to that of Ikea; that, however, as the company Ikea Holding France argues, the Minister does not give any precise indication on the content of the services rendered to the franchisees of these trademarks in return for their royalty; these trademarks are notoriously inferior to Ikea’s and they ... Continue to full case