socialmedian: Ikea is owned by a "charitable foundation," pays only 3.5% tax

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Ikea is owned by a "charitable foundation," pays only 3.5% tax

Source: Boing Boing

Aug 27, 2009

Summary

Ikea's corporate structure is insanely complicated. It is technically owned by a Dutch charitable nonprofit -- a strategy that allows the group to pay 3.5% tax on annual profits of €553m. However, the charity itself appears to do almost no charitable giving. Most of the money disappears into generic line-items like "other operating charges" which it refuses to explain.

In 2004, the last year that the INGKA Holding group filed accounts, the company reported profits of €1.4 billion on sales of €12.8 billion, a margin of nearly 11 percent. Because INGKA Holding is owned by the nonprofit INGKA Foundation, none of this profit is taxed. The foundation's nonprofit status also means that the Kamprad family cannot reap these profits directly, but the Kamprads do collect a portion of IKEA sales profits through the franchising relationship between INGKA Holding and Inter IKEA Systems.

Inter IKEA Systems collected €631 million of franchise fees in 2004, but reported pre-tax profits of only €225 million in 2004. One of the major pre-tax expenses that Inter IKEA systems repo

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Comments (1)

Itafroma,

Aug 27, 2009

"Ikea's corporate structure is insanely complicated. It is technically owned by a Dutch charitable nonprofit -- a strategy that allows the group to pay 3.5% tax on annual profits of €553m. However, the charity itself appears to do almost no charitable giving. Most of the money disappears into generic line-items like "other operating charges" which it refuses to explain."