The EU is continuing its crackdown on corporate tax avoidance.
According to the Financial Times, the European Commission, the executive body of the EU, plans to launch an investigation into Ikea on Monday.
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Ikea reportedly created two separate corporate groups in the Netherlands, Luxembourg, and Liechtenstein, enabling it to move “money and profits to take advantage of special tax schemes.” The arrangement allegedly “helped Ikea avoid nearly one billion euro ($1.1 billion) in EU taxes from 2009 to 2014,” according to a 2016 report commissioned by the Green Party in European Parliament. Nevertheless, the investigation will seek to reveal whether it broke any European rules.
The investigation itself is not necessarily an indication of lawbreaking, but does reflect an ongoing concern with tax evasion. The Wall Street Journal notes that previous probes have led to companies paying billions in back taxes—Apple (AAPL), for example, was ordered to pay 13 billion euros ($15.3 billion) to Ireland last year. Both Apple and Ireland are contesting the ruling.
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Since 2013, the European Commission has looked into more than one thousand tax deals between EU countries and multinationals, notes the Financial Times, five of which found wrongdoing. In addition to these investigations, the EU has changed its rules to “require more transparent reporting from companies, closed some tax loopholes, published a tax haven blacklist, and proposed EU-wide comprehensive tax reform.”
