Paradise Papers -Nike Case PDF

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PARADISE PAPERS

Nike fails to stop EU probe on billions in alleged tax dodging https://www.icij.org/investigations/paradise-papers/nike-fails-to-stop-eu-probe-onbillions-in-alleged-tax-dodging/ The footwear giant argued that it’s being singled out after the Paradise Papers investigation revealed its Dutch tax arrangements. By Will Fitzgibbon Image: JEWEL SAMAD/AFP/Getty Images July 15, 2021

Mark Parker is the executive chairman of Nike, Inc., and former president and CEO.

Footwear giant Nike cannot stop a probe into possible multibillion dollar tax avoidance, one of Europe’s highest courts ruled this week. The General Court of the European Union on Wednesday rejected Nike’s arguments, which sought to end a high-stakes inquiry by the European Commission into allegations that the company obtained an unfair advantage over competitors when it signed deals with Dutch authorities in 2006 and 2010. “The General Court does not accept any of the arguments put forward and dismisses the action in its entirety,” judges wrote. The European Commission opened the probe into Nike’s Dutch tax arrangements in 2019 following an investigation by the International Consortium of Investigative Journalists and more than 300 journalists.

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The Paradise Papers investigation revealed how the footwear and apparel manufacturer amassed billions of dollars in foreign earnings offshore. Much of the income was shifted out of Europe before it could be taxed, ICIJ reported. In its submission to the court, Nike alleged that the European Commission targeted the company “unfairly” due to political pressure following ICIJ’s Paradise Papers investigation. The Commission should also have opened probes into 700 other companies with a similar tax structure, the company argued. © 2021 — The International Consortium of Investigative Journalists. All rights reserved. ……………………………………………………………

Original Article:

EU investigates Nike's tax status in the Netherlands https://www.theguardian.com/business/2019/jan/10/eu-investigates-nikes-tax-status-inthe-netherlands Companies should not be able to reduce taxable profits to gain unfair advantage, says commissioner

Nike’s European HQ is based in the Netherlands. Photograph: Daniel Kalisz/Getty Images Fri 11 Jan 2019 06.38 AEDT

The European commission has opened an investigation into the tax treatment of Nike in the Netherlands, saying it may have given the US sportswear maker an illegal advantage. The commission said in a statement that Dutch authorities had issued five tax rulings from 2006 to 2015, two of which were still in force, endorsing a method to calculate the royalty payments to two Nike entities based in the Netherlands. The executive body, which oversees competition policy in the 28-member European Union, said it was concerned that the royalty payments endorsed by the rulings “may not reflect economic reality”. It confirmed that it had intensified its investigation following allegations arising from the Paradise Papers, an investigation into tax avoidance published by the Guardian as part of a global collaboration of news organisations led by the ICIJ in Washington. 2

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“The commission had already received some information on these rulings in the course of its overall investigation on tax rulings practices in all member states before the Paradise Papers were leaked,” a commission spokesperson said. “Following the Paradise Papers allegations, the commission intensified its investigation and requested additional information from the Netherlands, which led to the doubts the commission is expressing in its opening decision of today.” The commission has pushed governments to tighten taxation rules in response to revelations in the so-called LuxLeaks and the Panama and Paradise Papers, but some countries have resisted EU-wide changes. The Nike case, announced on Thursday, follows other investigations by the EU executive since 2013 into tax schemes in Belgium, Gibraltar, Luxembourg, Ireland and the Netherlands that it says allow companies to establish structures to reduce their taxes unfairly. The countries have been ordered to recover the tax from beneficiaries of such schemes, which have included Amazon, Apple, Starbucks and Fiat. “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 EU competition commissioner, Margrethe Vestager, said in a statement. Nike said it was subject to and ensured that it complied with all the same tax laws as other companies operating in the Netherlands. “We believe the European commission’s investigation is without merit,” a Nike spokesperson said. The Dutch finance ministry said it would cooperate with the commission’s investigation and said that it agreed tax rulings should provide certainty and not preferential treatment. Vestager did say she welcomed actions taken by the Netherlands to reform its corporate taxation rules and to help to ensure that companies operate on a level playing field. The commission said its new investigation concerned the tax treatment of two Nike companies based in the Netherlands – Nike European Operations Netherlands BV and Converse Netherlands BV – which market and record sales for the US sportswear retailer’s operations in Europe, the Middle East and Africa. They received licences to use intellectual property rights of Nike and Converse products in the region in return for tax-deductible royalty payments to two other Nike entities also based in the Netherlands, but not taxable there. The commission said the royalty payments appeared higher than what independent companies would have agreed between themselves. As a result, the Netherlands may have allowed the Nike companies to pay a lower amount of tax. If this was confirmed, it would amount to illegal state aid.

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………………………………………. https://tpcases.com/the-european-commission-opens-in-depth-investigation-into-taxtreatment-of-nike-and-converse-in-the-netherlands/

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