In May, Nike’s offshore mountain of accumulated profits was worth more than $12bn. The CV model, and the one that preceded it in Bermuda, appear to have helped Nike substantially reduce its global tax rate.Nike Innovate does not seem to have tax residency anywhere in the world. It is seemingly beyond the reach of Dutch tax authorities, and it is out of range for the US taxman, even though Nike is a US-registered company with headquarters in Portland, Oregon. So, Nike Innovate CV is a treasure indeed.Many of the US’s largest multinationals use similar subsidiaries. Nike is not the only multinational to use the CV model. Nike Innovate is not being taxed anywhere else, either. The “CV” model allows Nike Innovate to avoid paying local taxes in the Netherlands. How does it work? It is complex – and controversial. This involved moving the company’s intellectual property from Nike International Ltd in Bermuda to yet another subsidiary, Nike Innovate CV. With the deal from the Netherlands due to expire, the company came up with a new plan, again with the agreement of Dutch authorities. The fees allowed Nike to legally shift profits away from Europe to Nike International Ltd. Even though this subsidiary did not appear to have any staff or offices in Bermuda, it charged large trademark royalty fees each year to Nike’s European HQ for selling its trainers. Nike did this through a Bermudan subsidiary, Nike International Ltd, which held the company’s intellectual property rights for its sneaker brands – the crown jewels of the Nike empire. However, from 2005 until 2014, Nike was able to shift vast sums of money out of the Netherlands to Bermuda, which is an offshore tax haven with zero tax.

They pay some tax on the near $8bn (£6bn) of revenue they receive from Nike sales across Europe, the Middle East and Africa. In particular, two companies are at the heart of Nike’s Dutch operations. The money from sales of shoes flows out of the UK to the Netherlands. That would make sense, but that is not what happens. Buy a pair of shoes in, say, London, and one would expect the cash to go to the company’s main British subsidiary, Nike UK Ltd.Vietnamese workers put the finishing touches on trainers at a Nike factory on the outskirts of Ho Chi Minh City.

Nike zoom structure