On Tuesday 18 October, three union organisations hit out at the American fast-food giant McDonald's, with fresh revelations regarding the tax it pays in Europe.
In 2015, a report published by a coalition of unions revealed that the multinational managed to avoid paying a billion euros in tax in Europe between 2009 and 2013 (see EUROPE 11262). The European Public Services Union (EPSU), the European Federation of Food, Agriculture and Tourism unions (EFFAT) and the Services Employees International Union (SEIU) are alleging that McDonald's has stepped up its tax optimisation practices, dodging up to €1.5 billion in taxation. These organisations claim that the company's effective taxation rate fell to 1% in 2014 and 0.7% in 2015.
They accuse the company of creating a subsidiary in Luxembourg with no economic activity whatsoever. "Despite being the 'Head Office', the Luxembourg branch neither manages the company, the franchise rights or their royalties. These are all managed by the Swiss branch", the three organisations claim in a statement. This statement, however, is not substantiated by any report and contains no more detailed explanation of these allegations.
The Commission is also taking an interest in the company's practices. In December 2015, it opened an in-depth investigation into tax rulings entered into with the Luxembourg administration.
The Commission states that it has concerns that, on the basis of two tax rulings issued in 2009, McDonald's Europe Franchising has paid no tax on companies in Luxembourg since then, despite massive profits (more than €250 million in 2013) (see EUROPE 11445). (Original version in French by Élodie Lamer)