The European Commission has launched an “in-depth investigation” into furniture giant Ikea’s tax affairs.

The Commission is to scrutinise the tax treatment by the Netherlands of Inter Ikea, which operates the franchise business.

The Commission said it is concerned that two Dutch tax rulings “may have allowed Inter Ikea to pay less tax”, creating an unfair advantage over other companies and therefore breaching EU state aid rules.

Commissioner Margrethe Vestager, who is in charge of competition policy, said: “All companies, big or small, multinational or not, should pay their fair share of tax.

“Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere. We will now carefully investigate the Netherlands’ tax treatment of Inter Ikea.”

The Commission is to investigate whether an annual licence fee paid by Inter Ikea Systems to fellow group company II Holding “reflects economic reality”. In particular, it will assess if the level of an annual licence fee reflects Inter Ikea Systems’ contribution to the franchise business.

It will also assess “whether the price Inter Ikea Systems agreed for the acquisition of intellectual property rights and interest paid for an intercompany loan… reflect economic reality”.