EU to investigate claims McDonald's avoided $1bn in tax

The European Union is investigating claims that McDonald’s avoided more than €1bn ($1.1bn) in tax by exploiting a controversial royalties loophole through Luxembourg.

The European Union competition commissioner Margrethe Vestager said on Tuesday that she was examining claims, made by trade unions, that McDonald’s paid just €16m of tax on royalties worth €3.7bn between 2009 and 2013.

“We are looking into the information gained by trade unions when it comes to McDonald’s in order to assess if there is a case, or if we should open cases there,” Vestager said.

McDonald’s is accused of channelling money through a Luxembourg-based subsidiary with a Swiss branch to exploit a generous tax break on intellectual property rights. It is a similar structure to that used by a host of multinationals exposed by the Guardian’s LuxLeaks investigation last year.

The trade unions claim that McDonald’s Luxembourg subsidiary employs just 13 people, yet booked €834m of revenue in 2013 – which would work out at more than €64m per worker.

Heidi Barker, a spokeswoman for McDonald’s, which on Monday promised to transform itself into a more modern, progressive and transparent burger company, said: “We will decline to comment on your inquiry.”

The commission has already opened investigations into the tax affairs of Amazon in Luxembourg, Apple in Ireland and Starbucks in the Netherlands.

Powered by article was written by Rupert Neate in New York, for on Tuesday 5th May 2015 22.33 Europe/ © Guardian News and Media Limited 2010


JefferiesAnd the Best Place to Work in the global financial markets 2018 is...

Register for HITC Business News