Nike is not alone: customs disputes on the rise in the retail sector

The Belgian tax and customs authorities are claiming 1.5 billion euros from Nike in a dispute over import duties. Such disputes about the interpretation of customs legislation are becoming increasingly common in the European Union.

Will other retailers follow suit?

Disputes like this one, where Nike clashes with local customs authorities, are far from isolated cases: legal experts expect that other companies that import products from different countries to local distribution centres could also find themselves in the cross-hairs of the tax authorities. The arrangements put in place by multinationals could be the subject of a wider investigation: the chances that Nike has been targeted specifically seem slim.

Nike is alleged to have understated import duties and VAT rates since 2018: Nike is said to have based the value of goods at its main distribution centre on an internal ‘first sale’, whereas the law requires the value of the ‘last sale’ to be used. Nike disputes these allegations and has taken legal action, but the case will not be heard until early 2026.

Complex customs legislation

Massimo Dutti, part of Inditex, is also said to be embroiled in a legal battle over the valuation of imported goods and the associated import duties. The dispute concerns clothing shipped to Spain from Asia via Switzerland. Spanish customs claim that the import duties are based on the second selling price, whereas Massimo Dutti used the first selling price.

According to tax experts, European customs legislation leaves too much room for interpretation, leading to frequent tax disputes. The introduction of the ‘Union Customs Code’ in 2016 changed the starting point for import duties from the first to the last sale, creating additional complexity. The Court of Justice of the European Union has been asked to clarify what is the correct interpretation.