IKEA digs in on a hefty ATO bill
The Australian Taxation Office wants A$171 million from IKEA. The flat-pack giant says: not so fast. In filings released this week, the retailer confirmed it is under audit for the 2016-2020 income years and plans to fight the assessment, Accounting Times reports.
The clash centres on transfer pricing and royalty withholding taxes. For readers interested in understanding the fundamentals behind such tax measures, our article on Introduction To Nigerian Tax Laws provides helpful background on how modern tax regulations are evolving. The ATO served position papers in 2025 that, according to The Australian, accuse IKEA of shifting profits offshore. A related story in International Tax Review notes the company has now instructed lawyers to formally dispute the claim, arguing its pricing is arm’s-length and that no provision is needed for any extra tax.
Why does this matter? Because IKEA is big business down under. Sales hit A$1.765 billion in 2025, yet profit was just A$91 million. That slim margin is what the ATO wants to probe. "We have worked collaboratively but strongly disagree," the company said. Translation: IKEA will build this defence piece by piece and bolt it tight.
For multinationals everywhere, the signal is clear. Transfer pricing audits are getting larger, longer, and louder. Fail to prepare, and the bill could arrive flat-packed but fully-priced. For additional context on the global ripple effects of tax reforms, see Nigeria joins global data-sharing pact as tax shake-ups ripple across sectors.
Around the Tax World
• IRS feels the tariff squeeze. Post-Trump tariffs are scrambling supply chains and swelling inter-company charges, Bloomberg Tax warns. Staffing cuts mean the agency must police tougher cases with fewer hands,an audit backlog is brewing.
• UK rewrites its playbook. The Finance Bill 2025-26 will overhaul transfer-pricing, permanent-establishment and diverted-profits rules from 1 January 2026, and HMRC’s International Manual is already updated, says KPMG.
• OECD eyes mobile workers. Global bodies, tax homes that shift with a laptop, OECD has opened a consultation on the “global mobility of individuals.” KPMG’s response highlights risks of double tax and data overload. Source: KPMG.
• Crypto gains, crypto pains. Filing a return on chain profits is still a headache. The looming Crypto-Asset Reporting Framework will add new reporting layers, Bitget News writes. Miss the form, and penalties bite.
By the Numbers
Prime Number: 25 %
That’s how much of its workforce the IRS lost in 2025, per Bloomberg Tax. Fewer auditors, bigger cases, pressure mounts.
Looking Ahead
Audits are stretching from Sydney to Silicon Valley. New rules land in the UK. The OECD wants feedback. All eyes are on transfer pricing. All eyes are on the rate.