WebJournal on International Taxation in Sweden (WITS)
no 6/2012 (September)
In WebJournal on International Taxation in Sweden (WITS) no 1/2012. see www. petersundgren.blogspot.com (February 2012) I wrote an article titled ”Ingvar Kamprad'sLiechtenstein foundation to pay tax in Sweden (and 39 other countries)?
Recently I received further information regarding the
said foundation and Inter IKEA Systems B.V. based in the Netherlands
which has prompted me to further investigate the tax consequences
that I had drawn in my article. This has given rise to the following
email exchanges with IKEA:
1.My mail to IKEA 29 August 2012
2.Mail from Anders Bylund 7, Head
of Group Communications Inter IKEA Group, September 2012
3.My
mail to Anders Bylund 11 September 2012.
------------------------------------------------------------------------------
1. Mail from me to IKEA 29 August 2012
(English translation)
To
Inter IKEA Group
attention:
Hans Gydell CEO
Thomas Bergström, Head of Franchise
Division
Hi,
My name is Peter Sundgren and
professionally I introduce myself as an analyst of international tax
matters. I have a blog, www.petersundgren.blogspot.com. Where
I publish miscellaneous information on international tax matters for
my ”WebJournal on International Taxation in Sweden”.
Recently I have focussed on the tax
consequences which in my view may occur concerning the royalty
payments that are made by IKEAs national companies/stores to the
Inter IKEA Group for the use of the IKEA concept. Briefly, but se my
blog for a closer analysis hereof, I believe that it could be
suggested that Inter IKEA is not the so called beneficial owner
of the IKEA concept but instead that Interogo in Liechtenstein is the
true owner of the concept for tax purposes. If so the tax exemption
which normally is provided in those countries wherefrom the royalties
are paid according to relevant tax treaties does not apply as such
exemption requires that the recipient of the royalty is the
beneficial owner.
My
assertion that Interogo should be considered the beneficial owner of
the IKEA koncept is that Interogo is the legal owner
of the concept. This is based on the statement made by Hans Gydell,
who in addition to his role as CEO of Inter IKEA is also a member of
the board of Interogo.
On
my blog I quoted the following statement by Gydell: ” In a recent
statement to Dagens Industri, Mr Hans Gydell, the CEO of Inter
IkeaHolding, has said that the
ownership of the IKEA trademark has beenplaced for all eternity in
the tax paradise Liechtenstein, ”andeven if Mr Kamprad would so
wish it would be impossible to breakthis up and transfer ownership
elsewhere. It was precisely for thepurpose of protecting the IKEA
concept and trademark for the futurethat this very special and stable
ownership arrangement was chosenand I have never heard him regret
this decision.”
This statement has been an extremely important basis for the
conclusions I have suggested regarding IKEA's tax exposure on the
matter of the beneficial ownership test.
However, today when I study the Inter IEA website I find the
following message:
”The Franchise Division with Inter IKEA Systems B.V.,the
owner of the IKEA Concept, (emphasis added) franchises the
systems, methods and solutions to franchisees worldwide for marketing
and sale of IKEA products under the IKEA trademarks.
The suggestion on the web that Inter IKEA Systems B.V. owns the
concept does consequently not harmonize with Mr Gydell's declaration.
Consequently, now, and which is quite embarrassing for me, I shall
have to correct and further comment the information previously
supplied to the readers of my blogg. And maybe, indeed, I shall have
to revise the conclusions I have made regarding the the tax
consequences I have discussed.
Before doing so, however, I
urgently request
that you carefully explain to me the relationship between Interogo
and Inter IKEA and clarify the conflicting information you have
provided regarding the ownership of the Inter IKEA concept.
Yours sincerely
Peter Sundgren
----------------------------------------------------------------------------
2. Email to me from Anders Bylund 7 August 2012
Hej Peter,
Thanks for your mail sent to my colleague Kirsten Saugman. It looks
like there has been some misunderstandings regarding some facts
leading to incorrect conclusions. It is important to not mix up the
different IP rights, i.e. retail system and trademarks.
The transaction 1st of January 2012 involved the IKEA Trademarks.
Other important IP rights such as systems, methods, proven solutions
and confidential know-how and so on for operation of IKEA stores,
what I here for refer to as the IKEA Retail System and also sometimes
referred to as the IKEA franchise concept, has however always been
fully owned by Inter IKEA Systems B.V.
Let me give you the background.
Inter IKEA Systems B.V. is the franchisor of the IKEA Retail System.
Inter IKEA Systems B.V. always had full ownership of the IKEA Retail
System. Inter IKEA Systems B.V. has also been the end receiver
(beneficial owner) of the IKEA franchise fees.
Tax authorities in the Netherlands has consistently over the years
confirmed that Inter IKEA Systems B.V. is the beneficial owner of the
IKEA retail system and the franchise fee income.
Inter IKEA Systems B.V. is since January this year also the full
owner of the IKEA Trademarks. On January 1st 2012 Inter IKEA Systems
B.V. acquired the IKEA Trademarks from Interogo Foundation.
Inter IKEA Systems B.V. was before January 2012 the registered owner
of the IKEA Trademarks according to a separate license agreement. In
accordance with this license agreement, Inter IKEA Systems B.V. had
an obligation to register and protect the IKEA trademarks. The
agreement gave Inter IKEA Systems B.V. the exclusive right to utilize
the IKEA Trademarks in its franchise operation.
Before the transaction Inter IKEA Systems B.V. paid a compensation
for the rights to utilize the trademarks. This compensation was a
separate payment and not linked to the franchise fee.
The franchise fee that the franchisees have paid to Inter IKEA
Systems B.V. includes getting access to systems and methods to
operate IKEA Stores, confidential IKEA know-how, and so on.
Inter IKEA Holding SA (the owner of Inter IKEA Systems BV) is fully
owned by Interogo Foundation. This is the long term and stable
ownership structure Hans Gydell was referring to in the article you
mention.
The facts on our website and the comments on the overall ownership
structure are consistent. Inter IKEA Systems B.V. is the beneficiary
owner of the IKEA Concept and the IKEA Trademarks. Interogo is the
owner of Inter IKEA Group.
We do realise that IP rights are complex topics. I myself have found
it difficult to explain the previous structure and the complexity has
caused misunderstandings. The transaction of the trademark in January
consolidated and simplified the ownership structure of the IP-rights,
and will hopefully help us avoid some misunderstandings.
Kind regards
Anders Bylund
Head of Group Communications
Inter IKEA Group
------------------------------------------------------------------------
3. Email from me to Anders Bylund 11 September 2012
Dear Mr Bylund,
Thank you for your email communication 7 September 2012.
I fully agree with your final statement therein that international
propery rights are complex topics and I can understand that you
yourself too have found it difficult to explain the structure and
complexity of the IKEA concept and related matters.
The main specific piece of news provided by you in your email, and a
fact of which I had absolutely no idea in March this year when I
wrote my blog article, is that ”Inter IKEA Systems B.V. since
January this year is the full owner of the IKEA Trademarks. On
January 1st 2012 Inter IKEA Systems B.V. acquired the IKEA Trademarks
from Interogo”. And also,I have now gained information that this,
which, however, also slipped myattention at the time, was reported in
the Swedish press sometime in July, some three to four months after
my article was published.
But I still have a problem with the timing of Mr Gydell's statement
that the IKEA trademarks were virtually locked into Interogo ”for
all eternity” and that this arrangement, which Mr Kamprad had never
regretted, could not be broken up even if he so wished. The statement
by Mr Gydell was published in Dagens Industri 2 December 2011. And
less than a month later - 1 January 2012 - the sale of Interogo's
IKEA trademarks to Inter IKEA Systems B.V. to the tune of 9 billion
euros (!) was completed. A suggestion that MrGydell, CEO of Inter
IKEA and member of the board of Interogo, was unaware of this
imminent and extrodinary deal is not convincing. Your explanation of
Mr Gydell's statement about the (pre 2012) ownership of the
trademarks as being a reference to Interogo's ownership of the shares
of Inter IKEA at a time when the sale of the trademarks was under way
also seems very bizarre.
Puzzling too is your declaration that ”Inter IKEASystems B.V. was
before January 2012 the registered owner of the IKEATrademarks
according to a separate license agreement” and that ”in
accordancewith this license agreement, Inter IKEA Systems B.V. had
anobligation to register and protect the IKEA trademarks. The
agreement gave Inter IKEA Systems B.V. the exclusive rights to
utilize the IKEATrademarks in its franchise operation”.
But it has just been established that IKEA Systems B.V. became the
owner of the trademarks on 1 January 2012 and it is very odd, to say
the least, that ownership should be aquired by a license agreement!
And why should one have an agreement to license/franchise something
that one owns? A natural interpretation of your information is rather
that the pre 2012 situation, when Interogo still legally owned the
trademarks, was that Interogo by the licence agreement, exacly as you
mention and which I repeat, ”gave InterIKEA Systems B.V. the
exclusive rights to utilize the IKEA Trademarksin its franchise
operation.” This,if anything, clearly establishes a back-to-back
sublicensing (chain) structure first between Interogo and Inter IKEA
System B.V. and then between Inter IKEA Systems B.V and the various
worldwide IKEAstores giving rise to license/franchise payments made
in the opposite direction. And these payments which, it is suggested,
have been made since 1989 when Interogo was set up, has amassed a
(tax free) capital of about 100 billion SEK in Interogo. Mr Kamprad
himself has confirmed this last mentioned sum.
As I mentioned in my blog article the beneficial ownership issue is a
complex one (too) and is presently under review by the OECD Committe
on Fiscal Affairs. In their 2011 discussion draft emphasis is placed
on the ability of the recipient of a dividend or interest or royalty
as the case may be ”to have the full right to use and enjoy the
income received unconstrained by any contractual or legal obligation
to pass the payment received to another person”.
In my view, and this has been strengthened by your information, the
pre 2012 structure and payments of the royalties, does indeed
establish that Inter IKEA Systems B.V. did not enjoy full ownership
rights to the IKEA trademarks nor was the company unconstrained to
pass its royalty payments received on to Interogo.This has therefore
confirmed my view that Interogo for tax purposes is the beneficial
owner of the franchise payments received by Inter IKEA B.V.
You have mentioned that the tax authorities in the Netherlands have
consistently over the years confirmed that Inter IKEA Systems B.V. is
the beneficial owner of the franchise fee income. This, it is
suggested, is probably conluded without any knowledge about
Interogo's existence in Liechtenstein, information about which
surfaced only eighteen months ago. Moreover, such an
interpretation,with all respect, does not preclude a different
opinion by the tax treaty states that have so far exempted the
payments from source taxes
I addressed my 29 August email to Mr Gydell and Mr Thomas
Bergström,Head of Franchise Division. I trust that they are
currently informed of these communications.
I for my part will keep my readership informed by putting this
correspondence on my blog.
Kind regards
Peter Sundgren
Inga kommentarer:
Skicka en kommentar