Newspaper article The Journal (Newcastle, England)

McDonald's Faces Probe over Taxes in Luxembourg

Newspaper article The Journal (Newcastle, England)

McDonald's Faces Probe over Taxes in Luxembourg

Article excerpt

FAST food chain McDonald's is being investigated by European authorities over allegations it struck a "sweetheart" tax deal with Luxembourg.

The European Commission (EC) said the probe will look at alleged deals struck by the global giant to avoid paying taxes in Luxembourg and the US.

The inquiry comes amid a European Union clampdown on tax avoidance deals by multinationals, with the EC ordering coffee chain Starbucks and car group Fiat in October to repay up to 30 million euros (PS22m) in illegal tax breaks.

The EC said the European arm of McDonald's has paid virtually no corporation tax in Luxembourg or the US since 2009 after two rulings were made in Luxembourg, despite making significant profits in the division - more than 250 million euros (PS177m) in 2013 alone.

EU anti-trust commissioner Margrethe Vestager said: "A tax ruling that agrees to McDonald's paying no tax on its European royalties either in Luxembourg or in the US has to be looked at very carefully under EU state aid rules. …

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