Nike Paid Out Just £1M In Tax On £100M In Sales Of Manchester United Replica Kits
Nike paid just £1M in tax over the past five years on £100M sales of its ManU replica kits, according to Simon Neville of the London EVENING STANDARD. The company funnelled nearly £40M over the period to its Dutch business "despite making most of its money on sales to football fans in the UK, according to accounts filed with Companies House." The legal loophole saw the total tax bill in the U.K. for ManU Merchandising, which is jointly run by Nike and the football club, reduced to just £255,000 last year after an £8.3M royalty fee "was paid to its Dutch subsidiary." Similar payments "have been made for at least the past five years." It means the taxman "missed out" on a potential £9.1M over the period from the England football kit makers (EVENING STANDARD, 7/7). In London, Simon Duke reported the accounting ruse "highlights the increasingly complex methods that American multinationals are using to minimise tax bills in large overseas markets, such as Britain." After seeing tax receipts ravaged during the financial crisis, European governments "have escalated their efforts to stamp out avoidance." The European Commission "is also investigating Ireland and Holland amid accusations that the countries offered 'sweetheart' tax deals to spur inward investment." Dublin and the Hague "deny that they broke EU rules." Holland "has become a popular destination for multinationals looking to slash tax liabilities." The country operates an “innovation box,” where profits from patents and other intellectual property "are taxed at just 5%" (SUNDAY TIMES, 7/6).