On Monday, January 25, US sportswear maker Nike urged Europe’s second-highest court to annul an EU investigation into its Dutch tax rulings, claiming the bloc’s competition enforcers had failed to show these amounted to illegal State aid.
The European Commission launched an investigation into Nike’s Dutch tax status in January 2019, part of a crackdown on multinationals’ sweetheart tax deals with EU countries giving them an unfair advantage.
At issue are five tax rulings issued by Dutch authorities from 2006 to 2015, two of which are still in force, which endorsed a method to calculate royalty payments to Nike’s Dutch entities – Nike European Operations Netherlands and Converse Netherlands – for the use of intellectual property.
EU enforcers stated that the royalty payments appeared higher than those which independent companies would have agreed between themselves, and may have unduly reduced the Dutch entities’ taxable base and given Nike a selective advantage amounting to illegal State aid.
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