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A McDonald’s restaurant in Virginia. The trade unions claim that McDonald’s Luxembourg subsidiary employs just 13 people, yet books €834m of revenue in 2013.
A McDonald’s restaurant in Virginia. The trade unions claim that McDonald’s Luxembourg subsidiary employs just 13 people, yet books €834m of revenue in 2013. Photograph: Saul Loeb/AFP/Getty Images
A McDonald’s restaurant in Virginia. The trade unions claim that McDonald’s Luxembourg subsidiary employs just 13 people, yet books €834m of revenue in 2013. Photograph: Saul Loeb/AFP/Getty Images

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

This article is more than 8 years old

Officials say they are examining allegations, made by trade unions, that fast-food giant exploited controversial tax loophole in Luxembourg

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.

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