Nike pimped $ 12.2 billion by exploiting loopholes of Dutch tax system

Dutch Nov 7: The International Consortium of Investigative Journalists (ICIJ) has once brought out paradise papers - the documents to shun the light on offshore entities.

The documents have exposed how global companies such as MNC have exploited the loopholes in the global tax system to shift their jurisdictions to tax havens to avoid paying taxes.

Paradise papers have revealed the strategy followed by the world famous Global Brand Nike company.

The Company has adopted a different strategy by cleverly exploiting the loopholes in the tax laws followed by Netherlands.The Dutch company earlier gave a 10 year tax holiday to the sports company.The company has established Dutch subsidiary, Nike Innovate CV.

The company has exploited the loophole that dates back to 1830 which states that "profits made through a CV are regarded as if they were made by the partners. As such, these earnings have been made outside the Netherlands and cannot be taxed there".



However, the other countries feel that Dutch CVs as much like regular companies and regard the taxing rights as belonging to the Dutch.

The strategy adopted to form Dutch CV or "commanditaire vennootschap" or limited partnership is called "hybrid mismatch".

The company has profited $12.2 billion by May 2017 from 2014 by using the above strategy by not paying taxes.


Nike response

We rigorously ensure our tax filings are fully aligned with how we run our business, the investments we make and the jobs we create.