McDonald’s record fine for tax avoidance in France: EPSU is Lovin’it!

Macdonald happy meal tax avoidance

(Brussels, Monday 23 May 2022, Press Release) Following the press announcement Friday 20 May that  McDonald’s has been hit with a record €1.1Bn fine for tax avoidance in France,  EPSU General Secretary  Jan Willem Goudriaan has stated:

It is good news that the global fast-food leader will not feed on impunity. This comes more than 7 years after we exposed McDonald’s untaxed royalties via a near 0-tax ruling in Luxembourg.

The historic record fine by the French government shows that stealing money from the public and workers can be punished.

I am proud that our report Unhappy Meal produced together with our sister US and European trade unions made has shed light on a business model of tax dodging to the detriment of workers and social welfare.

The report led to the Commission’s investigation of McDonald’s tax stratagems, which were found immoral although not illegal considering EU competition rules. We hope this record fine will encourage the Commission to once and for all fix the broken tax competition rules in the EU and to consider another investigation. McDonald’s tax dodging in Europe has not stopped.

EPSU calls upon EU governments to enforce global public country by country reporting and swiftly adopt a global corporate minimum tax of at least 25% rather than the 15% as proposed by the Commission and the OECD.

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For more information: Pablo Sanchez psanchez@epsu.org 0032 (0) 474626633

Background information:

-The French tax authorities have found that McDonald's applied an abnormally high level of royalties to its restaurants to transfer a large part of its turnover to Luxembourg and then to the United Kingdom in order to limit its tax bill.  

-The fine, higher than the €965 million Google had to pay in 2019, is a record, to which further penalties will be added.

-The settlement is expected shortly in the framework of a judiciary public interest convention: this scheme put in place in 2018 aims to bear pressure on companies suspected of tax fraud to close more swiftly legal proceedings.  

-A global coalition of trade unions consisting of SEIU, EPSU, EFFAT, PSI and IUF and UK War on Want organisation have been sounding the alarm on McDonald’s tax avoidance in Europe for years.

Since 2015, unions have participated in hearings at the European Parliament on McDonalds' tax avoidance and meetings with French politicians and European Commission’s DG Competition. Two well-received reports have been published, alongside War on Want: "Unhappy Meal" in 2015, which estimated McDonald’s tax bill in the range of €1bn for the period of 2009-2013,  and "Unhappier Meal" in 2018, both detailing McDonalds' tax avoidance in Europe.

-Last March, another report co-published by War on Want and CICTAR revealed that since the previous tax reports, the global fast-food leader has created a new tax dodging scheme now based in London. It focuses on transactions involving franchise/intellectual property rights for Asia, but the UK structure now includes that intellectual property for all of Europe and is likely to have major impacts on public revenue across Europe.