McDonald's faces half billion euro tax bill

It's not quite on the same scale as Apple's €13bn (£11.1bn) tax bill in Ireland, but McDonald's is set to be the next company to be hit with a major repayment order by the European Commission.

McDonald's: facing a hefty tax bill
McDonald's: facing a hefty tax bill

The fast food chain could be told to pay €448m to the government of Luxembourg, the FT reports.

A review of the Commission’s probe into McDonald’s found that it paid an average tax rate of 1.49% on $1.8bn of profit that went through its Luxembourg-based European headquarters since the 2009 reorganisation of the business.

The figure of €448m comes from calculating the shortfall, should Luxembourg’s standard tax rate of 29.2% be applied to those earnings.

That was the principle used in the Apple case last month, when the tech giant was told to repay €13bn to the Irish government after the EC ruled tax deals struck between the two parties amounted to illegal state aid.

McDonald’s said: "We pay the taxes that are owed and have not received any preferential treatment. From 2011-2015 McDonald’s companies paid more than $2.5bn just in corporate income taxes in the European Union, with an average tax rate approaching 27%."


Subscribe to Campaign from just £57 per quarter

Includes the weekly magazine and quarterly Campaign IQ, plus unrestricted online access.


Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now

1 Meet the new breed of ad agency chiefs

A new wave of first-time CEOs are opting to do things differently in an evolving landscape. They discuss the business model of the future with Jeremy Lee.

Case study: How 'This girl can' got 1.6 million women exercising

1 Case study: How 'This girl can' got 1.6 million women exercising

"This girl can" was based on a powerful insight: that the fear of judgement by others is the primary barrier holding women back from participating in sport.

Just published