Tax Avoidance By Nike: Just Do It!
11 October, 2013
When 13 years ago Mel Gibson and Helen Hunt in What Women Want introduced the No games. Just Sports. line, nobody could have predicted how the world would change in just a decade.
Back in 2000, tax avoidance was the perfectly legal way of using a particular tax regime to ones advantage. There was nothing wrong about it and various forms of tax avoidance were widely used by all of us.
Now in 2013, it is a different story. Tax planning attempts are being criticised and even criminalised by the international community and the world leaders hide behind them, looking for a scapegoat while defending their weak political and economical moves.
While many multinationals slowly start agreeing to play the new game of Please tax us, we have nothing to hide!, Nike has chosen the Just Do It! approach.
According to its 2012 Annual Return, the apparel giant has placed a profit of almost USD 7 billion at the bank accounts of dozens of its subsidiaries in Bermuda. And has done it in style: 10 out of 12 offshore companies carry the names of Nikes shoe models. To name a few:
Air Max Limited, Nike Flight, Nike Pegasus, Nike Tailwind and of course Nike Waffle.
Besides being funny, the reasoning behind the shoe names has to do with the intellectual property that is being moved into the offshore subsidiaries when structured properly, a perfectly legal way of avoiding US tax.
According to Nike, having foreign subsidiaries for the purpose of minimising tax burden is neither illegal nor immoral. In fact, it is no different from making use of the tax deductible home mortgage interest or charitable deductions. It is just that Nikes savings are bigger.
Nike. No games. Just sports.
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