By building cross-border structures of interconnected companies that trade with one another, global businesses are often able to find ways of unlocking tax savings that no lawmaker intended them to receive. Nike’s tax planning over the years exemplifies how adept multinationals can be at staying ahead of the game. Source: SEC Filings Evolving tax strategies In the three years after that conference call, its after-tax profits would jump by an astounding 55 percent, to $1.88 billion, thanks in substantial part to a drop in its worldwide effective tax rate from 34.9 percent to 24.8 percent – on its way to 13.2 percent last year. Nike’s tax burden hasn’t been the same since. The mechanics of tax avoidance are rarely scrutinized on such calls despite the enormous earnings boost they can provide – and the damage they can do to national treasuries.īehind the scenes, authorities in the Netherlands had effectively given Nike the green light for a 10-year tax-avoidance arrangement that would allow the sportswear-maker to shift billions of dollars in profits from Europe to the tax haven of Bermuda. This had, he said, “secured a big advantage.”Īn advantage over whom or what? How big? What did this favorable agreement entail? These were all questions the analysts did not ask. He reeled off a list of recent achievements, including a brief mention of “a more favorable long-term tax agreement in Europe,” according to a transcript of the call. “So, how are we doing?” he asked himself out loud, almost a year since his promotion to the job. Five days before Christmas 2006, Nike chief executive Mark Parker was in an upbeat mood on a conference call with Wall Street analysts.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |