EU executive launches probe into Dutch tax regime for Nike

Tax arrangements between sneaker giant Nike and the Dutch government are being scrutinized by European Union competition regulators, the bloc’s executive Commission said yesterday.

The probe is centered on two Dutch-based companies that are part of the sports goods maker’s global operations and specifically about whether tax agreements they made with the Dutch authorities may have breached EU rules on state aid.

“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,” EU Competition Commissioner Margrethe Vestager said.

In a written statement, Nike said the company “is subject to and rigorously ensures that it complies with all the same tax laws as other companies operating in the Netherlands. We believe the European Commission’s investigation is without merit.”

The Dutch government did not immediately comment on the probe.

It is not the first time Dutch tax treatment of foreign companies has run into regulatory trouble.

In 2015, the Commission ruled that the Netherlands gave tax advantages to Starbucks. That led to Dutch authorities recovering 25.7 million euros (USD30 million) from the coffee giant. The commission is also looking into tax agreements between the Dutch government and Ikea.

Such probes have, in the past, led to huge tax takebacks. In August 2016, the commission ruled that Ireland gave “undue tax benefits” to Apple, leading to the recovery of 14.3 billion euros by Irish authorities. AP