January 11, 2019
Ranking of the Netherlands in Oxfam tax haven list
The European Commission is investigating tax deals struck between Nike and the Netherlands.
Tax rulings made by Dutch authorities between 2006 and 2015 endorsed a method to calculate royalty payments which the commission says “may not reflect economic reality”. The implication is that Nike were allowed to pay a more favourable rate than their competitors, an arrangement which would constitute illegal state aid.
If true, the arrangement would fit a pattern for the Netherlands, which, according to Oxfam, is the third most prominent corporate tax haven in the world after Bermuda and the Cayman. The commission is already engaged in an in-depth investigation of Dutch tax rulings thought to unfairly benefit IKEA, and in 2015 the Commission found that Starbucks’ Dutch subsidiary underpaid between €20 and €30 million in corporate tax.
These deals can bring short-term benefits to the countries that offer them but they also perpetuate a crony capitalist system which benefits huge multinationals at the expense of competition, fairness, and innovation.