McDonald’s tax deals under investigation by the EU

McDonald’s European tax arrangements have come under the microscope as part of a new investigation into whether the business is receiving state aid form Luxembourg.

Luxembourg also drew the attention of regulators a year ago when the “LuxLeaks” revealed that hundreds of companies were benefiteing from government tax deals brokered by PricewaterhouseCoopers.

But they have run afoul of the European Commission’s tough rules on state aid, which are created to ensure fair competition for all.

A McDonald’s spokesperson said: “McDonald’s complies with all tax laws and rules in Europe and pays a significant amount of corporate income tax”.

“For too long, McDonald’s has stashed billions in tax havens and ducked contributing to state coffers while simultaneously imposing poverty wages on its workers… and it’s time that the company be held accountable” Scott Courtney, organising director at SEIU, said in a statement.

“Our independent franchisees, who own and operate approximately 75%of our restaurants in Europe, also pay corporate tax and many other taxes”, the company said. European Union competition officials said Fiat had a similar deal with Luxembourg.

Corporate tax avoidance has become a hot political issue in Europe.

The case will put the spotlight back on European Commission President Jean-Claude Juncker as Luxembourg developed its favourable tax system during the near quarter-century that he served as finance minister or prime minister or held both jobs.