Nike used Dutch loop­hole to cut taxes, says re­port

Sports­wear gi­ant ex­ploited le­gal gaps to re­duce its tax rate in Europe to just two per cent

Business Daily (Kenya) - - CORPORATE NEWS GLOBAL -

US sports­wear gi­ant Nike used a loop­hole in Dutch fis­cal law to re­duce its tax rate in Europe to just two per cent, ac­cord­ing to the leaked Par­adise Pa­pers.

Two com­pa­nies based in the Nether­lands con­cen­trated all Nike’s Euro­pean rev­enues, al­low­ing the com­pany to avoid pay­ing tax on “prof­its in the coun­tries where it ac­tu­ally

Un­der a sys­tem set up in 2014, Nike paid it­self for the right to use its brand and arti icially re­duced its pro its...

sells its shoes,” French daily Le Monde said. The find­ings have emerged as part of the Par­adise Pa­pers re­leased late Sun­day by the Us-based In­ter­na­tional Con­sor­tium of In­ves­tiga­tive

Jour­nal­ists (ICIJ), which was be­hind sim­i­lar leak last year of the Panama Pa­pers.

Ac­cord­ing to the re­port on Nike, the sports­wear man­u­fac­turer man­aged to bring its tax on prof­its down to two per cent from the 25 per cent av­er­age for Euro­pean com­pa­nies.

To carry out this “tour de force”, Nike used the Dutch fis­cal sys­tem “and its im­mense pos­si­bil­i­ties for op­ti­mi­sa­tion,” said Le Monde.

Un­der this sys­tem, set up in 2014, Nike paid it­self for the right to use its brand and ar­ti­fi­cially re­duced its prof­its thus re­duc­ing also its taxes, ac­cord­ing to the re­port.

The sys­tem was so ef­fec­tive that it re­duced Nike’s global tax rate “from 24 per cent to 16 per cent in three years,” and Euro­pean coun­tries are ask­ing the Nether­lands to make up the short­fall, the pa­per said.

There was no in­di­ca­tion that Nike had done any­thing il­le­gal and the com­pany, when con­tacted by Le Monde, said it acted in ac­cor­dance with fis­cal law.

How­ever the Ox­fam char­ity was unim­pressed.

“Th­ese tens of bil­lions that es­caped be­ing taxed ben­e­fit a tiny mega-rich mi­nor­ity and rep­re­sent a con­sid­er­able loss to state bud­gets, and it’s the poor­est who pay the price,” said Manon Aubry, Ox­fam spokeswoman in France.

AFP

AFP

SCAN­DAL Re­port says Nike man­aged to bring its tax on pro its down to two per cent from the 25 per cent av­er­age for Euro­pean com­pa­nies.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.