IKEA has vowed to contest an Australian Taxation Office probe alleging the Swedish home furnishings giant owes $171 million in unpaid withholding royalty taxes, saying it strongly disagrees with the ATO's audit findings.
In accounts lodged last week, IKEA Australia disclosed the dispute, which relates to an audit of the 2016 to 2020 income years, and said it did not consider it probable that any tax was payable and had therefore made no provision.
The company has engaged external legal advisers and said it was committed to paying taxes in accordance with local laws.
The scrutiny comes as Ikea Australia reported a net profit of $91.2 million for the year to August, up from $51.3 million in 2024, on revenue of $1.77 billion.
The ATO said it was unable to comment due to taxpayer confidentiality laws.