The European Commission has launched an investigation into tax benefits granted by the Netherlands to furniture giant Ikea.
The commission will investigate two tax rulings by the Netherlands for Inter Ikea, one of the two groups that operate the Ikea business.
The commission "has concerns" that the Dutch rulings have given Ikea an unfair advantage against other companies, which is against EU competition rules.
The EU's executive arm alleges the Netherlands has allowed Ikea to shift profits through different schemes to Luxembourg and Liechtenstein, where the money was not taxed.
"Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere," Margrethe Vestager, European commissioner for competition, said.
The commission put no figure on its latest allegations against Ikea, but a report by the Green party in European Parliament last year said Ikea avoided one billion euros ($1.5 billion) in EU taxes between 2009 to 2014.
Privately held since its creation in 1943, the Ikea group has a complex corporate structure and is run by various foundations that has allowed it to stay clear of Sweden's high taxes.
'Biggest tax havens'
The commission's probe concerns two tax agreements brokered between the Netherlands and Inter Ikea, a Dutch-based unit of the retail giant that receives franchise fees from Ikea shops worldwide.
In the first tax ruling, between 2006 and 2011, Inter Ikea was allowed by the Netherlands to pay a hefty license fee to another Ikea unit in Luxembourg, thereby shifting revenue to a jurisdiction where it remained untaxed.
In 2011, after Brussels forced a law change in Luxembourg, Inter Ikea arranged a second ruling with the Netherlands, this time involving a complex loan arrangement with an Ikea unit in Liechtenstein, and again the Swedish company successfully shifted taxable revenue to a low tax jurisdiction.
"The Netherlands fully supports the Commission's work," a senior Dutch EU official said, adding the government would have to look at the details of the case.
The move against Ikea came at the urging of the Greens party in European Parliament which mounted a major campaign to put the spotlight on Ikea.
"This is a huge success for the Greens as it comes from our initial complaint. Europe works," MEP Sven Giegold told AFP.
"It is shocking that the Netherlands, a founding member of the EU, is one of the biggest tax havens in the world," he said.
'Bring clarity'
Ikea in a statement insisted that its tax deals in the Netherlands did not breach EU laws.
"It is good if the investigation can bring clarity and confirm that," the company added.
Many of the Brussels probes came in the wake of the "LuxLeaks" scandal which revealed details of tax breaks given by the wealthy duchy to dozens of major US firms.
The revelations came as a particular embarrassment for European Commission President Jean-Claude Juncker, who was prime minister of Luxembourg at the time when the tax deals were made.
In a similar Dutch case, the EU decided against coffee-shop chain Starbucks in the Netherlands and ordered the latte and espresso-maker to pay roughly 30 million euros in back taxes.
In accordance with Vestager's blockbuster 2015 decision against Apple, Ireland said earlier this month it will begin collecting the 13 billion euros in back taxes owed by the US-based iPhone-maker.
- with AAP
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