The European Commission announced on Thursday 10 January the opening of an in-depth investigation to determine whether two companies of the US multinational Nike paid too little tax in the Netherlands between 2006 and 2015 through Dutch tax rulings, in violation of EU state aid rules.
Through licenses to use intellectual property rights for the promotion of Nike products in Europe, the Middle East and Africa, the companies Nike European Operations Netherlands BV and Converse Netherlands BV established in the Netherlands have paid tax-deductible royalties to two other companies of the Nike group, themselves based in the Netherlands and not taxable in that Member State. The recipients of the royalties have no employees and do not engage in any economic activity.
The Commission is concerned that the amount of tax-deductible royalties, endorsed by five tax rulings, two of which are still in force, may not reflect economic reality. These fees appear to be higher than what independent companies trading on market terms would have agreed between them.
If it appears that the Nike group has indeed been unduly favoured by the Netherlands, this would constitute illegal State aid.
In parallel, the European Commission has taken note of the Dutch authorities' intention to abolish the granting of tax rulings to international structures linked to a tax haven or if the purpose of such an arrangement is essentially to avoid Dutch or foreign taxes.
Since 2013, the Commission has been examining the tax rulings in progress in the European Union. Investigations are ongoing into the Dutch tax arrangement issued in favour of Inter IKEA, and a tax regime for multinationals in the United Kingdom.
In August 2016, the European institution ordered Apple to return 14.3 billion euros to Dublin because of illegal tax rulings (see EUROPE 12098, 11612).
More recently, in June 2018, the Commission summoned two companies of the Engie group to return the sum of 120 million euros to Luxembourg (see EUROPE 12045). Luxembourg brought an action for annulment against this decision before the Court of First Instance of the European Union (see EUROPE 12086). (Original version in French by Damien Genicot, intern)