Nike and prohibited state aid?

In the Dutch Parliament, questions have been asked about possible prohibited state aid provided by The Netherlands to Nike.

This relates to the investigation started by the European Commission. The European Commission has doubts about certain aspects of the tax rulings as concluded by the Dutch tax authorities to two in the Netherlands-based limited liability companies. These companies hold the intellectual property which give the rights to sell products in the EMEA-region.

The determination of the taxable profit, made over a limited operational margin on basis of the sale, is the subject of the discussion.

The precise contents of the rulings will not be made public.

The discussion is being conducted on the introduced requirement ‘economic nexus’.

Another issue is that the payments between the Nike-companies seem to be not at ‘arm’s length’.

If is determined that the payments based on the rulings are too high, the tax base in The Netherlands is too low, and unlawful state aid may have been given.