Nike has failed to stop an investigation into its Dutch tax affairs in a boost for the European Commission’s efforts to crack down on large corporations obtaining favourable deals from member states.
Europe’s second-highest court said on Wednesday that regulators in Brussels had acted properly in a procedural case against Dutch officials over their rulings on Nike’s tax matters between 2006 and 2015.
“The commission complied with the procedural rules, and neither failed to fulfil its obligation to state reasons nor made manifest errors of assessment,” said the General Court in Luxembourg.
The US sports maker had argued that the commission’s investigation, opened in 2019, was premature and based on insufficient information.
The probe, which focuses on whether Nike may have obtained an unfair advantage over its competitors in relation to tax rulings from the Dutch authorities, will continue as a result of the court’s decision.
The court’s decision comes after 130 countries agreed this month to force large multinationals to pay a minimum corporate tax rate of at least 15 per cent.On Monday the commission, the EU’s executive arm, suspended its plans for a controversial digital levy until at least September in an effort to pave the way for a global tax agreement.Margrethe Vestager, the EU’s executive vice-president in charge of competition policy, has been leading the fight against tax advantages received by corporations in some of the bloc’s member states such as Ireland. The EU’s record is patchy, however. Brussels has won cases against Fiat and Engie but lost against Amazon and Apple. In its biggest defeat, Brussels is appealing a court decision that quashed an order for Apple to pay back €14.3bn in tax advantages to Ireland. At the time of the appeal to the European Court of Justice, the highest court in the bloc, Vestager said regulators needed to continue “to use all tools at our disposal to ensure companies pay their fair share of tax”.
She added: “Otherwise, the public purse and citizens are deprived of funds for much needed investments — the need for which is even more acute now to support Europe’s economic recovery.”
In a statement Nike said “we believe the European Commission’s investigation is without merit,” adding that it is “subject to and rigorously ensures that it complies with all the same tax laws as other companies operating in the Netherlands”. The company can appeal the ruling.