McDonald’s on the hook for as much as $500m in back tax
McDonald’s is the latest multinational firm to fall foul of the European Commission with reports that the burger chain is on the hook for $500m in back taxes to Luxembourg.
The fast food chain is accused of engaging in state-backed tax avoidance just weeks after Apple was ordered to pay a mammoth €13 billion tax bill in Ireland.
Investigators found that McDonald’s paid an average tax of just 1.49 per cent on profits of $1.8bn earned by its European HQ in Luxembourg after striking a deal which saw it avoid paying any form of corporation tax on royalty income from European franchises, either in the US or Europe.
Luxembourg’s standard tax rate sits at 29.2 per cent which would put McDonald’s on the hook for as much as half a billion dollars.