American and European unions are once again targeting the American fast-food giant McDonald's, with new revelations about its tax optimisation practices, this time against the backdrop of Brexit.
In the 20-page report, the European Federation of Public Service Unions (EPSU), the European Federation of Trade Unions in the Food, Agriculture and Tourism sectors (EFFAT) and the Service Employees International Union (SEIU) spoke out on Monday 14 May against “how, in the midst of a tax probe and the day after Brexit, MacDonald's changed its tax structure”.
In 2015, the coalition of unions published a report revealing that the multinational had swerved €1 billion in tax in Europe between 2009 and 2013 (see EUROPE 11262).
Since the European Commission launched its investigation into state aid in December 2015 (see EUROPE 11445), McDonald's has considerably restructured its activities, closing its main subsidiaries in Luxembourg and transferring the headquarters of the others to the US, but, in particular, transferring its tax optimisation holding from Luxembourg to the UK at the end of 2016. The group also uses subsidiaries in British territories such as the Cayman Islands, Bermuda and Guernsey - which are included on the European grey list of non-cooperative jurisdictions in taxation matters.
The new corporate structure is so opaque that the new tax base is currently unknown, the organisations add.
The unions call upon the Commission to continue and step up its investigation into the company. “The EU cannot allow businesses like McDonald's to act in total impunity; the EU's credibility is at stake”, the Secretary General of EPSU, Willem Goudriaan, concluded, upon publication of the report.
The deputy chair of Parliament's special committee on tax fraud and tax evasion ('TAX 3'), Eva Joly (Greens/EFA, France), considers that this is one more report showing that companies have not changed strategy and continue to exploit the loopholes in tax legislation and the absence of harmonisation to avoid paying their fair share of tax. In particular, she added, it shows that with Brexit, the UK may become the biggest tax haven on the EU's doorstep.
The report is available at: https://bit.ly/2wQTvcL . (Original version in French by Marion Fontana)