by Nick Robinson | Jun 07, 2016 | Business Tax
McDonald’s always seems to be in the news about something. Whether it’s the fact that their burgers don’t seem to decay, or the amount of salt they put on their fries, despite their popularity people do seem to enjoy complaining about them.
But a few weeks ago there was really something to complain about.
The French headquarters of McDonald’s was raided by police and tax crime officials as part of a tax probe. Documents were seized during the raid which was carried out after officials grew suspicious that the tax accounts at the fast food chain were not what they should have been. The thinking is that McDonald’s tax bills have been unlawfully lowered due to it funnelling earning into Luxembourg. This is where McDonald’s European headquarters are based, so initially perhaps it could be seen as above board.
The person behind the raid is European Commissioner Margrethe Vestager. The commissioner has carried out similar probes in the past against Fiat Chrysler and Starbucks after their tax arrangements were called into question. Both companies were found to be guilty of purposefully and unlawfully lowering their tax bills, and were ordered to pay up to £22.8 million. This money was a combination of fines and backdated taxes.
A McDonald’s spokesman has said that not only does the company pay all of its taxes – with an average rate of 27% – but it also pays taxes on property, social components and various other resources too. They insisted that although the majority (75%) of the restaurants were franchises, they too paid everything that was owed.
The outcome of the investigation should be interesting – and since Vestager has been through all of this before, the results shouldn’t take too long to come through.