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EU probes McDonald’s Luxembourg arrangement

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.

An alleged 'sweetheart' tax deal saw the fast food chain’s Luxembourg wing, McD Europe Franchising Sarl, generate €834m (£600m) in revenue in 2013 despite having a minimal staff skeleton of only 13 people.

Officials from Brussels will be tasked with surmising whether the Luxembourg arrangement breaches EU state-aid rules. If the investigation finds McDonald’s benefited unfairly from its presence it will be hit with a substantial back tax figure.

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.

"While we have not been notified by the European Commission, we are confident that should an inquiry occur, it would be resolved favorably."

Concluding: “From 2010-2014, the McDonald’s Companies paid more than $2.1bn just in corporate taxes in the European Union, with an average tax rate of almost 27 per cent.”

The probe represents the latest tax investigation from the EU which has already probed Amazon and Fiat in Luxembourg and Starbucks and Apple’s arrangements in Ireland.

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