THE EUROPEAN UNION is to investigate McDonald’s over claims its structure allowed it to avoid more than €1bn (£730m) in tax.
It is alleged by trade unions that the fast food purveyor exploited a royalties loophole through Luxembourg, allowing it to pay just €16m of tax on royalties worth €3.7bn between 2009 and 2013.
It is accused of diverting cash through a subsidiary based in the Grand Duchy, with a Swiss branch to exploit a generous tax break on intellectual property rights.
The unions claim McDonald’s Luxembourg subsidiary employs just 13 people, yet booked €834m of revenue in 2013 – roughly around €64m per worker.
McDonald’s maintains it has fully complied with EU law.
“We are looking into the information gained by trade unions when it comes to McDonald’s in order to assess if there is a case, or if we should open cases there,” European Union competition commissioner Margrethe Vestager said.
On Monday, McDonald’s promised to become a modern, progressive and transparent burger company.
The commission has already opened investigations into the tax affairs of Amazon in Luxembourg, Apple in Ireland and Starbucks in the Netherlands.