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.
“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.
