• The European Commission has announced an investigation into McDonalds’s tax arrangements with Luxembourg.
• The issue is whether its special favoured treatment by Luxembourg amounted to illegal state aid. It is reported the deal let McDonalds pay no, or virtually no, tax on the profits from its European franchises.
• Commissioner Vestager is reported as saying “A tax ruling that agrees to McDonald’s paying no tax on their European royalties either in Luxembourg or in the US has to be looked at very carefully under EU state aid rules. The purpose of double taxation treaties between countries is to avoid double taxation – not to justify double non-taxation.”
Tax Barrister, Accountant