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EU investigates Nike over tax

Neil Hodge | January 14, 2019

The EU’s executive body launched an inquiry last Thursday (10 January) following concerns that two of Nike’s Netherlands-based companies—Nike European Operations Netherlands BV and Converse Netherlands BV, which develop, market, and record the sales of Nike and Converse products in Europe, the Middle East, and Africa (EMEA)—have been effectively receiving illegal state aid over the way the Dutch government treated them for tax purposes.

These two companies received licences to use intellectual property rights of Nike and Converse products throughout EMEA in return for tax-deductible royalty payments to two other Nike entities also based in the Netherlands, but not taxable there.

Between 2006 and 2015, the Dutch government issued five tax rulings to Nike—two of which are still in operation. These endorsed the company’s method for calculating tax-deductible royalties paid to offshore subsidiaries.

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