Paradise Papers reveal how sports giant Nike stays one step ahead of the tax man by moving money through huge network of companies in dozens of countries - and even in no country at all
- Nike has established a number of subsidiary companies in numerous countries
- These all charge each other for intellectual property rights and other services
- One of these companies has been established with no tax residency whatsoever
- This has allowed them to shed their global tax rate from 34.9% to just 13.2%
- 'Paradise Papers' leak exposes how rich and powerful are protecting their wealth
- Affairs of figures such as the the Queen and Lewis Hamilton have been unveiled
- Stars of BBC's Mrs Brown's Boys allegedly piled £2million into an offshore fund
Sports giant Nike has spun a complex web of businesses based in dozens of countries that allows them to beat the taxman, the Paradise Papers have shown.
A multitude of subsidiary companies have been established for Nike to funnel money through by charging each other for property rights and other services, in order to minimize their tax costs .
Often, money from one transaction is funneled through multiple countries and sometimes even ends up beyond the realms of any nation.
This model has allowed them to shed their global tax rate from from 34.9 per cent, to just 13.2 per cent last year.
When a pair of Nike shoes are bought in the UK, the money goes to its hub in the Netherlands, rather than into Nike UK Ltd, its main British subsidiary.
The Dutch HQ is the first destination for all sales made in Europe, Africa and the Middle East.
Between 2005 and 2014, vast sums were sent out from Netherlands to zero-tax state Bermuda through Nike International Ltd, which was registered on the Caribbean Island and held all intellectual property rights for its shoes.
Huge royalty fees for the use of Nike International's logo was then sent to the Netherlands base, allowing profits to simply be diverted to Bermuda.
In 2014, Nike Innovative CV was a established as a replacement for Nike International, which had to be closed following a change in the rules - but it has no tax residency whatsoever.
A spokesman told the Guardian: 'Nike fully complies with tax regulations and we rigorously ensure our tax filings are fully aligned with how we run our business, the investments we make and the jobs we create.
'Nike’s European headquarters has been based in the Netherlands since 1999. It employs more than 2,500 people, who oversee Nike operations in over 75 countries.'
The Paradise Papers dossier says cash was secretly funnelled to the Cayman Islands and Bermuda and revealed Bono, members of Donald Trump’s cabinet and businesses including Apple and Facebook also invested in tax havens.
The Queen, Irish U2 star Bono, members of Donald Trump’s cabinet and some of the world’s biggest firms including Facebook are also named among the 13.4million confidential documents.
Hundreds of individuals and companies reportedly have had their overseas investments exposed by the files, which are also said to reveal that major global companies have exploited offshore schemes to avoid tax.
First obtained by the German newspaper Suddeutsche Zeitung, the documents stem from two offshore service providers and company registries from 19 tax havens, the Guardian reports.