Nikes Dutch tax deals are the latest target of an European Union crackdown on corporate tax practices
"Sky News contacted Nike's European headquarters but the company had not responded by the time of writing.The commission has an ongoing investigation into Ikea's tax model used in the Netherlands to see if it breached EU state aid rules.The competition watchdog is concerned that in 2006 and 2011, the world's largest furniture retailer received tax rulings that allowed it to declare lower pre-tax profits in the country - and therefore pay less tax.It argued the rulings may have given the company an unfair advantage over competitors and breached state aid rules in the process.In August 2016, the commission concluded that US tech giant Apple received illegal tax benefits from Ireland, because it allowed Apple to pay substantially less tax than other businesses.The ruling eventually led to the recovery of €14.3bn in tax, but only after the country was hauled in front of the European Court of Justice in 2017.
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
"The Nike group's corporate structure itself is outside the remit of EU state aid rules," the EC said in a statement.Margrethe Vestager, commissioner in charge of competition policy, said: "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.
Nike investigated by EU over Dutch tax affairs
"At the same time, I welcome the actions taken by the Netherlands to reform their corporate taxation rules and to help ensure that companies will operate on a level playing field in the EU.
The Commission will investigate carefully the tax treatment of Nike in the Netherlands, to assess whether it is in line with EU State aid rules.
EU opens probe into Nike’s Dutch tax arrangements
However, tax rulings that confer a selective advantage to specific companies can distort competition within the EU's Single Market, in breach of EU State aid rules.
Global sports giant Nike is being investigated by the European Commission over its tax arrangements in the Netherlands.According to the commission, its in-depth investigation will examine whether tax rulings granted to Nike by the Netherlands gave the company an unfair advantage over competitors, in breach of the EU's state aid rules.The probe relates to two of the US company's subsidiaries based in the Netherlands - Nike European Operations Netherlands BV and Converse Netherlands BV.The commission claims both units obtained licences to use intellectual property rights relating to Nike and Converse across the region in return for a tax-deductible royalty payment from two other Nike subsidiaries that were not taxable in the Netherlands.
BRUSSELS—The European Commission on Thursday opened an investigation into Nike Inc.’s tax deals with the Netherlands, which could potentially lead to the U.S. company having to pay back millions of euros.
Nike probe comes after several U.S. firms were ordered to pay millions to countries where they struck sweetheart deals
The Commission investigation will focus on whether the Netherlands' tax rulings endorsing these royalty payments may have unduly reduced the taxable base in the Netherlands of Nike European Operations Netherlands BV and Converse Netherlands BV since 2006.
Nikes Dutch tax status investigated by EU regulators