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McDonald’s Faces EU Investigation over Tax Avoidance

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McDonald’s could be facing a European Commission (EU) investigation into its tax affairs.

EU competition commissioner Margrethe Vestager said she is looking into trade union allegations that McDonald’s avoided paying more than €1 billion ($1.1 billion) in corporate taxes between 2009 and 2013.

Unions claim McDonald’s diverted nearly €4 billion of revenues into a Luxembourg subsidiary staffed by 13 people.

McDonald’s has rejected the claims.

Photo Reuters

Photo Reuters

Margrethe Vestager said her office is “looking into the information gained by trade unions when it comes to McDonald’s in order to assess if there is a case.”

The coalition of European and US unions claims that McDonald’s reduced its tax burden by moving its British headquarters to Switzerland and then channeling money into a Luxembourg-based subsidiary that also had a Swiss branch.

The unions said the Luxembourg offshoot had revenues of €3.7 billion over the five-year period but reported paying €16 million in taxes.

McDonald’s maintains that it has complied fully with EU tax law.

The EU has been cracking down on what it sees as aggressive tax avoidance by multinational companies, last year opening investigations into Apple in Ireland, Starbucks in the Netherlands, and Amazon in Luxembourg.

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