This week, EU regulators accused Luxembourg of illegally helping McDonald’s avoid taxes on hundreds of millions of euros in profits.
European Commission officials have opened a formal inquiry into a 2009 tax deal between McDonald’s and Luxembourg. They allege the deal exempted a McDonald’s subsidiary from taxes, despite the fact that officials knew McDonald’s was not paying taxes on the money in the U.S.
“McDonald’s Europe franchising [subsidiary] has virtually not paid any corporate tax in Luxembourg nor in the U.S. on its profits since 2009,” the commission said in a statement. The deal not only may have given McDonald’s an unfair edge over rivals, but also may have breached European laws.
The investigation comes two months after the European Commission ordered Luxembourg to recoup up to 30 million euros from Fiat Chrysler Automobiles and the Dutch to do the same for Starbucks because of tax deals seen as unlawful aid.