The European Commission has begun a tax investigation of furniture retailer Ikea, the commission announced on Monday.
Dutch tax rulings may have allowed the company to pay less in tax and have an unfair advantage over competitors, the commission said in a statement.
The issue concerns taxation of Inter Ikea, which globally franchises the Ikea name and stores but does not share in store revenues or profits.
The commission said two rulings by Dutch tax authorities, in 2006 and 2011, may have significantly reduced Inter Ikea’s taxable profits.
“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,” European Commission commissioner Margrethe Vestager said.
The Greens Party in the European Parliament said Inter Ikea used the Dutch tax advantages to avoid paying nearly $1.2 billion in taxes between 2009 and 2014, EUObserver.com reported on Monday.
The commission has previously investigated tax avoidance structures of multinational companies, including Apple, Starbucks and Amazon.
Ireland began receiving nearly $15.33 billion in back taxes this month from Apple after a commission investigation determined that Apple used a loophole in Irish tax law to store much of its non-U.S. profits in the country.
By Ed Adamczyk