The European Commission has opened an investigation into Nike’s tax arrangements in the Netherlands, claiming that they may have given the sportswear giant an unfair advantage.
Allegedly, classic Dutch scheme: Nike NL pays inflated royalties to Nike shell company that owns the swoosh, keeping its profits and taxes low. Shell co. pays no tax on royalties in NL. It should pay tax in US, but prob finds ways to minimize these https://t.co/Cbno7aaCCR
— Matt Steinglass (@mattsteinglass) January 10, 2019
The commission said that Dutch authorities had issued five tax rulings from 2006 to 2015, two of which are still in force, endorsing a method to calculate the royalty to two Nike entities based in the Netherlands.
Margrethe Vestager, the EU’s competition commissioner, announced the probe today as she criticized nations for allowing companies to set up complex structures “that unduly reduce their taxable profits and give them an unfair advantage.”
Vestager added: “Member states should not allow companies to set up complex structures that unduly reduce their taxable profits and give them an unfair advantage over competitors.”
The Dutch government said that it would cooperate with the investigation.
We are opening an in-depth investigation to examine whether tax rulings granted by the Netherlands to Nike may have given the company an unfair advantage over its competitors.
Learn more → https://t.co/wmOxNGXf1F pic.twitter.com/QWqBJuuGrG
— European Commission 🇪🇺 (@EU_Commission) January 10, 2019