This Is How IKEA’s Tax Scheme Works

An Ikea store in California
An Ikea store in California

LEIDEN â€" Over the years, several journalists have dug into the corporate structure of Swedish furniture giant IKEA and the business dealings of founder and CEO Ingmar Kamprad. But the probes have turned up little dirt.

But now, the European Parliament's Green Party group say they have managed to map out IKEA's complex revenue scheme they believe has allowed the company to dodge some one billion euros in taxes, reports Swedish daily Dagens Nyheter.

It was at European Parliament hearing in November 2015 that the Norwegian-born former French magistrate and Green party leader Eva Joly became interested in IKEA.

When IKEA's director of corporate finance, Krister Mattsson, told the hearing that the multinational was often confused with the company Inter IKEA, Joly and other EU Green Party officials were curious to know more. Now in a report released over the weekend, Joly's party says it can trace how the Swedish company moves money around different parts of the IKEA Group between different countries to minimize its tax burden. This is how they say it works:

• IKEA stores pay 3% of their profit in royalties to Inter IKEA in the low-tax Netherlands (IKEA is the furniture company, while Inter IKEA owns the trademark and the concept of the brand). By doing this, the taxable profit in eight of IKEA's European subsidiaries is reduced by 35 to 64%.

• Inter IKEA then transfers the money in two directions: one amount goes to an unknown recipient â€" who may be the former secret Interogo Foundation in Liechtenstein â€" and a second amount as interest to Interogo Finance in Luxembourg. The interest is due to an internal loan from when Inter IKEA bought the IKEA brand from Interogo Finance for 86 billion Swedish kronor in 2012 (circa 9 billion euros) and borrowed more than half of the money from Interogo.

• This money is not taxed because the Netherlands does not tax royalties and interest money that is sent abroad.

• Interogo Luxembourg then pays the revenue to Interogo Foundation in Liechtenstein. Thanks to a tax treaty with Luxembourg, and because the money is sent out of the country to Liechtenstein, Interogo Finance paid only 0.06% in taxes between 2012 and 2014.

• The Interogo Foundation in Liechtenstein does not need to pay taxes on the revenues it receives because the country does not impose tax on money sent from abroad.

The Green party has now asked the European Commission to review the report and determine whether IKEA has breached any EU law.

In a statement released to Swedish paper Dagens Industri, IKEA said they cannot comment because they have not been shown the report. The company also emphasized that it conducts its business in a responsible manner, stating that "IKEA Group pays taxes in accordance with the laws and regulations wherever we operate through retail, manufacturing, or in any other way.”

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How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.

But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

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