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EU: Investigation into McDonald’s tax deal with Luxembourg likely

 |  December 2, 2015

EU antitrust regulators are likely to launch a formal investigation into McDonald’s tax deal with Luxembourg, two people with knowledge of the matter said on Wednesday, widening the bloc’s crackdown on corporate tax avoidance.

European Competition Commissioner Margrethe Vestager could announce the investigation as early as Thursday, the sources said, following on the heels of other recent cases, including deals between Luxembourg and carmaker Fiat and online retailer Amazon.com.

Labor unions and the charity War on Want, have accused McDonald’s of avoiding around 1 billion euros in tax between 2009 and 2013 by routing revenue through a Luxembourg unit and have called for EU regulators to take action against the U.S. fast-food chain.

McDonald’s, in a statement, said it had not been told of any EU investigation and that it complies with all tax laws and rules in Europe.

“From 2010-2014, the McDonald’s companies paid more than $2.1 billion just in corporate taxes in the European Union, with an average tax rate of almost 27 percent,” the company said.

“Additionally, we pay social, real estate and other taxes. Our independent franchisees, who own and operate approximately 75 percent of our restaurants in Europe, also pay corporate tax and many other taxes.”

The EU competition enforcer has been considering evidence regarding McDonald’s for some time, said a third source familiar with the issue.

Full content: The Wall Street Journal

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