The European Commission launched an investigation on Thursday into whether the Netherlands violated EU rules by allegedly giving Nike unfair tax advantages.
Two Nike operating companies based in the Netherlands, the Netherlands of Nike European Operations Netherlands BV and Converse Netherlands BV, were able to claim a tax deduction for royalty payments to two other non-taxable Dutch Nike companies.
According to the press release, “The Commission investigation will focus on whether the Netherlands’ tax rulings endorsing these royalty payments may have unduly reduced the taxable base in the Netherlands of Nike European Operations Netherlands BV and Converse Netherlands BV since 2006.” This could have given the two operating companies an unfair advantage over other corporations.
If Nike is found to have violated EU laws, the company might have to pay back taxes.
Nike claimed that the investigation was “without merit.”
According to The New York Times, “The Netherlands has come under pressure from the European Commission and Dutch citizens disgruntled about special favors for big companies.”