Thursday, December 21, 2017

Ikea is Swedish for Crap

I have written about Ikea before in the blog, Ikea is my Walmart, with regards to the duplicity and exploitation that the "Swedish" company does to obfuscate earned dollars and in turn pay taxes.

Well firstly (in this case I am going all Trump as the similarities cannot be denied:  Ikea is not Swiss, its Dutch. Well Dutch in the same way Swiss Miss is Swiss cocoa. And that is true as the founder is Swedish, the company, however, is not. But the founder ironically lived in Switzerland.  The company is incorporated in the Netherlands for tax reasons.  So quick summary: Swedish dude forms a company, he incorporates it in the Netherlands and lived in Switzerland for tax reasons.   And he is 89 not that it matters but hence the Trump comparison, old white fuck who is ripping off people and governments.   But he did move back to Sweden and why: Part of the reason for his move back to Sweden is the new, lower tax rate that the country is offering.  What is Swedish for Welcome Back Fucker!

Secondly:  It is formed as a non-profit.  Huh? Well that is tough to explain but the way the corporation was established  it is formed as the Stichting Ingka Foundation – which was set up with the intention of “safeguarding the future of furniture”.  

The firm’s not-for-profit status has partially come as a result of its stated ambition to provide cheap and affordable furniture to aid living standards, with its mission statement claiming that it wants to “create a better everyday life for the many”.  So to summarize: The Stichting Ingka Foundation is a charity that the founder Kamprad  formed, in which he insists that he gave away all his wealth to charity back in 1982 and in turn his business is run under the charity with the idea that the charity and in turn Ikea (owned by said charity) supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.  What is Swedish for bullshit? 

Thirdly:  Instead of pouring its resources into charitable projects, the foundation owns Dutch company Ingka Holdings. This firm in turn owns the IKEA Group, which operates all of IKEA’s global retail stores. Such a complex structure isn’t entirely unheard of, but in this instance, the fact that Ingka Holdings is owned by a non-profit foundation means that it has been able to secure far lower tax rates than its competitors. However, the structure of the company gets even more convoluted: the ‘IKEA’ trademark itself is owned by yet another company called Inter IKEA Systems, which is based in the tax haven of Luxembourg. This firm takes care of the franchising side of the business, while Ingka Holdings is in charge of operations. What is Swedish for What the flying fuck?

This is so much like the Trump Organization and their holdings down to the senior owner/manger and his convoluted bullshit I cannot believe he has not been asked to join the Trump Cabinet!

This also is what will be happening in America thanks to the new GOP tax bill.   Hide the money under the walnut, under, the bowl, under the pot, under the box, and out the door only make sure you form a corporation, an LLC  for each entity.

Then we have the singular difference between Trump and Ikea (or whatever their name is) is the promise to locate a retail outlet in a economically challenged area.  Last November the company was doing battle with a US tax authority, when a much-delayed store being built in Memphis, Tennessee and they faced challenges from the Shelby County tax assessor over a $9.5m tax break that IKEA had received from the local government. While IKEA’s store is highly coveted in the area,  and signifying gentrification and bringing in much-needed new jobs, concerns over a major corporation receiving such a generous tax exemption are understandable. As once again the agreements in said deal never pan out.  Gosh what is that word in Swedish for we were scammed!

By the way Gentrification is not just an American issue.  And with it comes the issues of the jobs they create and of course the pay they are earning which is below a living standard for these now newly changed communities.  And in turn one should be thrilled working for a non profit as they are often paid less, sure that's it. But they also unlike other European industries are virulently anti union.  And their labor history goes back years and again not just here but in Europe as well.  What is Swedish for Fuck you labor!

Fourthly:  Many of the current regulations that Trump is so proud of removing actually address Ikea and by address I mean their shitty killer dressers.  Those dressers have been under class action litigation which was just settled.  And now thanks to Trump said lawsuits and consumer protections just came crashing down just like those dressers.  Ikea, Swedish for crap.

Fifthly:  Sustainability.  Climate Change.  Pretty much Trumpian there.   Ever own some Ikea furniture?  It is crap, it made be made "green" but that is fairly a pale shade.  Filling landfills with that disposable crap is not green. There has been talk of investments in alternative energy in their factories  but again all of this is under question as there were or are tax incentives across the globe for these investments.  And there are  questions with regards to the legitimacy of said claims and are believed to be mere window dressings for a hugely profitable company that has come under intense scrutiny in recent years for its tax affairs.  Green in Swedish is Money.

And whoops they are bigly being investigated by the EU for not being a crappy furniture manufacturer but for not paying taxes. 

Ikea Is Focus of European Inquiry Over Possible Skirting of Tax Bills

DEC. 18, 2017

Ingvar Kamprad, the founder of the global furniture retailer Ikea, is known for buying his clothes at flea markets, driving an old Volvo and flying only economy class. Although he is a billionaire many times over, he revels in his reputation for saving money.

Now, European regulators are accusing Mr. Kamprad’s company of pushing the concept of thriftiness beyond the limits of the law by maneuvering to reduce its tax bill in the countries where it operates.

The European Commission, the European Union’s executive arm, said on Monday that it had opened an investigation into Inter Ikea, one of the retail giant’s two main divisions, amid concerns it may have been given unfair tax advantages by the Netherlands, where Inter Ikea is based. The inquiry is part of an intensifying campaign by European regulators to crack down on what they view as sweetheart deals between multinational companies and tax-friendly countries that have sought to draw their business.

The announcement adds Ikea to a list of firms targeted by European officials for using sophisticated strategies in Ireland, the Netherlands and other European Union countries to pay few or no taxes on billions of dollars of profits. Other companies facing similar scrutiny include Starbucks and Apple

Led by Margrethe Vestager, Europe’s top antitrust regulator, Brussels is also gearing up for an offensive against technology companies with a raft of proposals that are meant to increase the amount of tax paid by behemoths like Facebook and Amazon.

Ikea, one of the world’s largest, and most opaque, privately held companies, reported revenue of 36.3 billion euros, or about $43 billion, for the latest fiscal year. But for well over a decade, Mr. Kamprad, his three sons and his close business associates have relied on a complex corporate structure to slash the taxes that Ikea pays on such earnings, regulators say. From 2009 to 2014 alone, Ikea avoided paying an estimated €1 billion in taxes, according to a report last year by the European Green Party.

Although Ikea is Swedish — the acronym combines Mr. Kamprad’s initials with those representing the bucolic area of the country where he grew up — the company is effectively owned by a Dutch trust controlled by the Kamprad family, with various holding companies handling its franchising, manufacturing and distribution operations.

The arrangement is designed to ensure maximum financial independence for Ikea, Mr. Kamprad has said.

“Already back in the ’60s, I started to look for ways to ensure Ikea could be kept as a private company to secure true financial independence and thus the freedom to have a long-term view on our investments and in business development,” he said in a statement posted on Ikea’s website. “I have often referred to that as securing ‘eternal life’ for Ikea.”

On Monday, in a separate statement issued in response to the regulators’ accusations, Ikea said it was “committed to paying taxes in accordance with laws and regulations wherever we operate.” It said it had operated “in accordance with E.U. rules” and pledged to cooperate with the inquiry.

Mr. Kamprad established the parent company, now called Inter Ikea, in the 1980s in the Netherlands, a country with attractive tax structures that have attracted Apple, Starbucks and many of the world’s biggest multinational companies. Using a Dutch subsidiary, Inter Ikea Systems, Inter Ikea collects fees from Ikea’s franchise businesses around the world equal to 3 percent of the revenue from all Ikea stores.

European regulators say that Ikea received a favorable ruling from Dutch tax authorities in 2006 that allowed Inter Ikea to send a significant part of those franchise profits, in the form of an annual license fee, to another company that Ikea created in Luxembourg, where it was not taxed.

Investigators are also examining how Ikea got a second favorable ruling from the Dutch authorities in 2011, after European regulators deemed the Luxembourg tax structure illegal under the European Union’s rules prohibiting companies from receiving state aid. That ruling endorsed a model that let Inter Ikea send a substantial portion of its franchise profit, via interest paid under an intercompany loan, to a company based in Liechtenstein.

The case is similar to one that Ms. Vestager brought against Starbucks in 2015. At issue were tax rulings, also issued by Dutch authorities, that she said helped the company artificially reduce its tax burden, an arrangement that ran afoul of the bloc’s state aid rules.

In addition to targeting companies like Ikea and Starbucks directly, Ms. Vestager has focused on employing a separate legal tactic to pursue countries that may be providing state aid to companies through special tax rulings. The rulings, known as comfort letters, often help the companies find the most favorable tax jurisdiction.

“All companies, big or small, multinational or not, should pay their fair share of tax,” Ms. Vestager said in a statement on Monday. “Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere.”

The Ikea inquiry is the latest investigation by European regulators since 2013 into the tax structures of multinational companies operating in Europe and how local tax authorities treat them.

The European Commission has ordered several members of the 28-nation bloc to collect billions of euros in back taxes from companies such as Amazon, Apple, Fiat and Starbucks.

The commission took Ireland to court this year after the authorities in that country refused to collect €13 billion in unpaid taxes from Apple after a 2016 decision by European regulators.

The commission is also investigating Luxembourg’s treatment of McDonald’s and Engie, the French power utility formerly known as GDF Suez, and a British tax program for multinational companies.

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