How Nike pay less tax by
charging themselves for
intellectual property
1
Regular accounting
Money from shoe sales across Europe, the Middle East and Africa all flow into Nike’s European headquarters in the Netherlands. The amount of tax due is determined by its reported net profits
Revenues
Taxable income
Costs
Net profit
Tax paid
2
Minimum-profit accounting
A subsidiary of the company charges the Dutch headquarters for intellectual property rights, resulting in much lower taxable profits
Revenues
Taxable income
Costs
Net profit
Payments to
subsidiary
Tax paid
Guardian graphic | Nikolaus Kommenda,
Josh Holder and Cath Levett
How Nike pay less tax by charging
themselves for intellectual property
1
Regular accounting
Money from shoe sales across Europe, the Middle East and Africa all flow into Nike’s European headquarters in the Netherlands. The amount of tax due is determined by its reported net profits
Revenues
Taxable income
Costs
Net profit
Tax paid
2
Minimum-profit accounting
A subsidiary of the company charges the Dutch headquarters for intellectual property rights, resulting in much lower taxable profits
Revenues
Taxable income
Costs
Net profit
Payments to
subsidiary
Tax paid
Guardian graphic | Nikolaus Kommenda, Josh Holder and Cath Levett
How Nike pay less tax by charging themselves for intellectual property
1
Regular accounting
Money from shoe sales across Europe, the Middle East and Africa all flow into Nike’s European headquarters in the Netherlands. The amount of tax due is determined by its reported net profits
Revenues
Taxable income
Costs
Net profit
Tax paid
2
Minimum-profit accounting
A subsidiary of the company charges the Dutch headquarters for intellectual property rights, resulting in much lower taxable profits
Revenues
Taxable income
Costs
Net profit
Payments to
subsidiary
Tax paid
Guardian graphic | Nikolaus Kommenda, Josh Holder and Cath Levett
How Nike pay less tax by charging
themselves for intellectual property
1
Regular accounting
Money from shoe sales across Europe, the Middle East and Africa all flow into Nike’s European headquarters in the Netherlands. The amount of tax due is determined by its reported net profits
Revenues
Taxable income
Costs
Net profit
Tax paid
2
Minimum-profit accounting
A subsidiary of the company charges the Dutch headquarters for intellectual property rights, resulting in much lower taxable profits
Revenues
Taxable income
Costs
Net profit
Payments to
subsidiary
Tax paid
Guardian graphic | Nikolaus Kommenda,
Josh Holder and Cath Levett