EU Penalties Could Cost Nike Billions

More than one year ago the International Consortium of Investigative Journalists published a report detailing a sweetheart arrangement between Dutch tax officials Nike, Uber and other U.S. multinationals. The loopholes and special deals allowed Nike to shift billions in trademark profits between subsidiaries to avoid high taxes in Europe. Since then the Netherlands has come under pressure from the EU and disgruntled Dutch citizens, prompting vows to tighten rules that allow companies to camouflage profits as “royalties” and protect them from taxes. Now an EU investigation into Nike’s deal is underway(tinyurl.com/yak64b3b). It could result in huge penalties similar to those imposed on Apple and Amazon. The inquiry, announced Jan 10, is part of a broader crackdown on countries like Ireland, Luxembourg and the Netherlands over questionable tax breaks to multinationals. The Netherlands attracts more foreign investment than Germany or France because of its business-friendly tax laws and officials. Big companies routinely minimize their tax bills through agreements with the Dutch Finance Ministry under which they funnel profits to offshore tax havens with little or no corporate taxes.