No, really. They’re not even Swedish! They’re a “charity” that’s based in the Netherlands, allegedly to promote design and architecture. But they don’t spend much of their money – they seem to be a big old tax shelter:
Ikea’s association with Swedishness and Swedish values is so ironic that one would be hard pressed to know where to begin. One obvious place to start would be to note that the Swedish government is using taxpayer money to give free advertising to a corporation that left Sweden to avoid paying taxes. Ikea contributes next to nothing to Sweden in the form of corporate tax, all while making billions off of its Swedish image. In fact, the company has gone to extraordinary lengths to avoid giving anything back to the national budgets of their host nations.
Ikea’s corporate structure is complicated, but the key point is that Ikea is a Netherlands-based “charity.” For many years, the vast majority of its outlets have been controlled by the Dutch company Ingka Holding, which in turn is owned by the not-for-profit Stichting Ingka Foundation, which was created in 1982 by the founder of Ikea, Ingvar Kamprad, for the purpose of ”furthering the advancement of architecture and interior design.” The Stichting Ingka Foundation is often listed as the wealthiest charitable foundation in the world, with assets in excess of $35 billion. As a result, Ikea pays a minuscule 3.5 percent nonprofit tax rate, far lower than its for-profit counterparts. In addition, recent revelations from LuxLeaks, an investigative project by the International Consortium of Investigative Journalists, show the company has made deals with the government of Luxembourg in order to pay as little tax as possible to anyone, anywhere.
This nonprofit is dedicated to “innovation in the field of architectural and interior design.” Indeed, the Foundation donated a few million to some Swedish universities, but the money is the singular, conventional nonprofit donation.
The Foundation’s cash is transferred to Stichting IKEA Foundation, another Dutch-registered charity, which can use the money for “for investing long-term in order to build a reserve for securing the IKEA group, in case of any future capital requirements.” Nice charity, if you can get it.
This is not the end of IKEA’s legal structure, however. Inter IKEA Systems, another private Dutch company but not part of the Ingka Holding group, holds the intellectual property rights to its “trademark” and “concept.” The owner of this Dutch entity is Inter IKEA Holding, registered in Luxembourg. A separate company in the Netherlands Antilles owns it, which in turn is run by a trust registered in Curaçao.
IKEA ends up paying roughly 3% in corporate taxes!
H/T Christian Christensen.
Every corporation is a tax shelter. It’s the job of our elected representatives to see that they remain that way. The federal corporate tax, by law, is 35%. The average corporation pays between 12% and 15% after deductions. Some corporations with ex-IRS employees working for them pay 0% in taxes. General Electric is a good example of that. The average wage earner pays 27% in federal income taxes. That’s called earned income. Those who earn interest and dividends from invested money pay 15% in federal taxes. That’s called un-earned income. The system is skewed in favor of the wealthy. We can fix that, but only if we send every Republican and Clintonite to a re-education camp.
Why didn’t I think of that! Maybe I can incorporate as a design charity, and live in my house tax free….