Five days before Christmas 2006, Nike CEO Mark Parker was in an upbeat mood on a conference call with Wall Street analysts. "So, how are we doing?" he asked himself out loud, almost a year since his promotion to the executive job. "In a word, I would say ‘good’." He reeled off a list of recent achievements, including a brief mention of "a more favourable long-term tax agreement in Europe", according to a transcript of the call. Behind 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. Nike’s tax burden hasn’t been the same since. In the three years after that conference call, its after-tax profit would jump by an astounding 55% to $1.88bn, thanks in substantial part to a drop in its worldwide effective tax rate from 34.9% to 24.8% — on its way to 13.2% last year. Nike’s tax planning over the ...

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