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EU set to investigate McDonald’s tax deal with Luxembourg

BRUSSELS (Reuters) – EU antitrust regulators are likely to widen their crackdown on corporate tax dodging with an investigation into a deal between fast-food chain McDonald’s and Luxembourg, two people with knowledge of the matter said on Wednesday.

Deals helping multinationals slash their tax bills to minimal amounts of as little as 1 percent or below have stirred public anger and regulatory action, particularly given the austerity measures and government spending cuts prevalent in many countries in recent years.

Action against McDonald’s was urged in February by umbrella organisations for unions representing millions of workers in the United States and Europe, and charity War on Want, who accused it of avoiding around 1 billion euros ($1 billion) in tax between 2009 and 2013 by routing revenue through a Luxembourg unit.

European Competition Commissioner Margrethe Vestager could announce the investigation as early as Thursday, the sources said, marking her latest action against multinationals.

In October, Vestager ordered the Dutch government to claw back up to 30 million euros in back taxes from U.S. coffee chain Starbucks and told Luxembourg to do the same for Fiat Chrysler Automobiles. Cases against Apple’s Irish tax deal and Amazon’s arrangement in Luxembourg are pending.

Commission spokesman Ricardo Cardoso and Luxembourg’s finance ministry both declined to comment. No one at McDonald’s could immediately be reached for comment.

The EU competition enforcer has been examining McDonald’s case for some time now, said a third source familiar with the issue.

($1 = 0.9466 euros)

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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