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What: Ikea Files Taxes As A Non-Profit Company

Image via Getty
Image via Getty

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Harboring overseas operations to evade high corporate tax rates is a surprisingly widespread practice, but Ikea plays on a whole different level of tax evasion. According to Fast Company, the world's largest furniture retailer files taxes as a non-profit organization.

Ikea pulls in about $28 billion in annual revenue. But Ikea is owned by Ingka Holding, which in turn is owned by the nonprofit Stichting Ingka Foundation. The Stichting Ingka Foundation is estimated to be even larger than the Gates Foundation, which is worth $37 million. However, Ikea's trademark and concept is owned by a separate company, Inter Ikea Systems. The non-profit, Stichting Ingka, pays Inter Ikea Systems to operate Ikea stores and use the branding every year. The assumption is that a good deal of those payments end up in the pockets of Ikea's founding family, while the Ikea company benefits from a 3.5% non-profit tax rate as opposed to the 18% corporate tax rate that any for-profit company headquartered in Switzerland would normally have to pay. The non-profit designation saves the company over $4 billion in taxes.
· Ikea Is A Nonprofit, And Yes, That's Every Bit As Fishy As It Sounds [FastCo]
· Which All-American Brands Keep Billions of Dollars Overseas? [Racked]
· Ikea Employee Reveals Catalog Products Are 75% Photoshopped [Racked]