The Paradise Paper leaks are shining new light on the schemes big brands like Nike use to dodge billions in taxes. And at the center is the Dutch government’s complicity with corporate tax loopholes.
Though Nike’s European headquarters are in the Netherlands, Dutch loopholes have allowed Nike to pass much of its taxable income has onto a shady subsidiary, Nike Innovate CV. This “CV” -- commanditaire vennootschap or limited partnership -- is conveniently “stateless” for tax purposes: meaning Nike owes nothing for the profits listed under this subsidiary.
It’s tricks like this that have allowed Nike to hide billions of dollars of profit beyond the scope of EU and US tax law. But every dollar Nike saves in tax-dodging is one dollar less for the public services we all rely on. That’s why we need to use the momentum of this massive leak to force a change.
Call on the Netherlands to close tax loopholes that allow Nike and others to skirt billions in tax obligations.
For years, companies like Nike have been exploiting tax havens like Bermuda the Netherlands to avoid paying their fair share. And it’s working -- Nike’s after-tax profits have jumped an astounding $1.88 billion since 2007. That leaves the rest of us picking up the cost as governments across the world slash social services, education, and infrastructure.
It doesn’t have to be this way. Increasing EU pressure has the Netherlands considering phasing out the CV model, which would leave Nike looking for a new loophole by 2021.
But rather than waiting years for new EU tax laws to overturn its model, the Netherlands can take a stand now for corporate responsibility. The Paradise Paper leaks have shone a new spotlight on the Netherlands’ role in facilitating corporate tax evasion. Now, it’s up to us to raise the pressure to force a change.
Ask the Netherlands to close tax loopholes that help Nike profit at the expense of the rest of us.