On Thursday, the 10th of January, 2019, the European Union had revealed that, they had launched an in-depth inquiry on the tax status of Nike Inc. in Netherland, accusing that the US Sportswear maker might have involved with in an unfair tax treatment.
The Nike investigation on Netherland would be followed by a thorough inquiry on Nike’s tax schemes in Belgium, Luxembourg, Ireland and Gibraltar, the EU announced on Thursday. According to the EU officials, the Nike Inc.
had been allowing companies to structure in such way, so they could deduce their tax unfairly. Beneficiaries of such Nike schemes included industry giants like Amazon, Apple, Fiat and Starbucks, added the EU officials. In a statement, the EU commission had been quoted saying that the Dutch authorities had issued five tax ruling between 2006 and 2015 and two of them are still operating, to endorse a method for calculating the royalty in to two Nike entities, which happened to be based in Netherlands.
However, the EU executive, responsible for overseeing competition policy in the 28-member EU, said that they were concerned over the subject matter that, the endorsed royalty payment might not reflect the economic reality.
In a statement, the EU Competition Commissioner, Margrethe Vestager said, “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. ”