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


Amazon prepares own sports clothing collection

17/10/2017

Amazon is allegedly planning its own collections of sports clothing, having contacted manufacturers working for chains like Gap and Uniqlo. These are currently only producing small numbers of clothing for testing purposes.

H&M invests in old clothing recycling

12/10/2017

Swedish H&M has acquired a minority stake in Re:newcell, which targets the recycling of old clothing in order to ensure a more sustainable fashion industry.

Uniqlo's profit more than doubled

12/10/2017

In the past fiscal year, Japanese Uniqlo more than doubled its profit on the back of a 4 % turnover increase. The fashion chain forecasts international sales to soon outgrow those of Japan.

Gucci also halts fur production

12/10/2017

Fashion brand Gucci will no longer use fur in its clothing and accessories, as CEO Marco Bizzarri promised during his Kering Award for sustainable fashion acceptance speech for the London College of Fashion.

Fashion platform About You launches in the Netherlands and Belgium

11/10/2017

German fashion web shop About You, the second largest online European fashion retailer, officially launched in Belgium and the Netherlands following an unofficial launch in the Netherlands some time ago.

Luxury group LVMH exceeds third quarter expectations

10/10/2017

French luxury group LVMH has surpassed turnover expectations in the first three months of its fiscal year. Louis Vuitton and Christian Dior’s parent company managed a 12 % like-for-like turnover growth, to 30.1 billion euro.

Back to top