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 reported was €590 million of "other operating charges." IKEA has refused to explain these charges, but Inter IKEA Systems appears to make large payments to I.I. Holding, another Luxembourg-registered group that, according to The Economist, "is almost certain to be controlled by the Kamprad family." I.I. Holding made a profit of €328 million in 2004.
In 2004, the Inter IKEA group of companies and I.I. Holding reported combined profits of €553m and paid €19m in taxes, or approximately 3.5 percent.
The Berne Declaration, a non-profit organization in Switzerland that promotes corporate responsibility, has formally criticized IKEA for its tax avoidance strategies. In 2007, the Berne Declaration nominated IKEA for one of its Public Eye "awards," which highlight corporate irresponsibility and are announced during the World Economic Forum in Davos, Switzerland.
Security researchers at Stony Brook deliberately visited websites that try to trick visitors into thinking that their computers are broken, urging them to call a toll-free “tech support” number run by con artists that infect the victim’s computer with malware, lie to them about their computer’s security, and con them out of an average of […]
Wells Fargo admits that its employees opened more than 2,000,000 fake accounts in order to run up fraudulent charges against its customers (employees who balked at committing fraud were fired and blacklisted for life from the banking industry); it also says that the customers it stole from can’t sue the company because fake account paperwork […]
The swift replacement of CRT screens with flat panels created tons of extremely toxic e-waste, with dangerous tubes and leaded glass posing unique environmental and safety hazards for disposal workers and sites.
Despite the upfront cost, electric toothbrushes are much better at removing plaque than those freebies from the dentist’s office. For those who struggle to fill the American Dental Association’s recommended two minutes of brushing time, or anyone with limited dexterity, a sonic toothbrush can give your oral care routine a boost.To keep your chops healthy […]
Learning a new language will give your resume an upgrade, sure, but it will also provide a huge cognitive boost for mental tasks outside of translation and conversation. Bilingual brains have been shown to be better at handling multiple concurrent tasks, and gaining fluency in a new tongue is an amazing way to improve memory, […]
If you struggle to get a good night’s rest, consider replacing your pillows before dropping hundreds on a new mattress. You can give your tired neck a break with a 2-pack of memory foam pillows, available now in the Boing Boing Store.Each of these pillows is stuffed with cooling polyurethane foam that molds to your […]