McDonald's saves 1 billion euro through Luxembourg

McDonald's saves 1 billion euro through Luxembourg

"McDonald's has saved 1.05 billion euro in taxes on its European activities thanks to fiscal optimization techniques", is what 3 different European trade unions have said.

Hamburger chain uses Luxembourg

The three unions (EPSU, EFFAT and SEIU) have calculated that McDonald's has diverted 3.7 billion euro of its European income towards McD Europe Franchising, which is based in Luxembourg and only paid 16 million euro in taxes in the 2009-2013 period. Had the income been taxed in the countries where it had generated the income and profits, the chain would have had to pay 1.05 billion euro in additional taxes.

 

The hamburger chain apparently pays 5 (fully deductible) % of its turnover in taxes towards the Luxembourg company and in return it can use the brand name and organizational formula. This particular type of income is taxed very advantageously in Luxembourg and that is why McD Europe Franchising was founded in 2009, immediately after the law was changed.

 

This "tax avoidance" is mainly targeted towards countries where the chain has huge turnovers: France (4.416 billion euro), Germany (3.619 billion euro), the United Kingdom (2.75 billion euro). The American fast food chain has defended its actions and has said it is full within the boundaries of the law.

 

The employees' representatives have asked the European Commission to investigate McDonald's fiscal moves. Allegedly, the European Commission has already launched 4 separate investigations into special tax regimes in Luxembourg, the Netherlands, Ireland and Belgium. The results for the first three investigations should be revealed in the second quarter.

Questions or comments? Please feel free to contact the editors


Fewer customers and lower turnover for H&M

15/12/2017

Swedish H&M Group suffered a 4 % turnover drop in the fourth quarter because its stores welcomed fewer customers.

Hunkemöller is European Retailer of the Year

14/12/2017

Dutch lingerie chain Hunkemöller has been elected “Retail of the Year Europe 2017-2018”. Q&A, which also elects a “Retailer of the Year” in Belgium and the Netherlands, organized the election for the third time.

Amancio Ortega leaves Inditex with strong quarterly growth

14/12/2017

Over the first three quarters of fiscal year 2017, Inditex’ turnover grew 10 % to 17.96 billion euro. The Spanish fashion company published the results as its boss, Amancio Ortega, stepped down.

Glimmer of hope for fashion retail in 2018

08/12/2017

McKinsey wrote in its The State of Fashion 2018 study that the industry has survived the harshest, even though nothing will ever be as it used to be. Growth will come from southern and eastern regions; fast-fashion will become even faster and the large companies will become even larger.

Gucci investigated for tax avoidance

04/12/2017

The Italian police raided Gucci’s offices in Milan and Florence, looking for evidence of tax avoidance. The fashion label admitted there was an investigation and that it is fully cooperating.

Quiksilver wants to acquire Billabong

01/12/2017

Surfing brand Quiksilver tabled a 150 million dollar (125 million euro) bid for its competitor, Billabong. It may be the latter’s only way out, with compounding losses in the past few years.

Back to top