McDonald's faces potential €1bn EU tax avoidance probe

image copyrightAP
image captionMcDonald's says it has complied with European tax laws

US fast-food giant McDonald's could be facing a European Commission (EU) investigation into its tax affairs.

EU competition commissioner Margrethe Vestager said she is looking into trade union allegations that the restaurant chain avoided paying more than €1bn (£658m; $1.1bn) in corporate taxes between 2009 and 2013.

Unions claim McDonald's diverted nearly €4bn of revenues into a Luxembourg subsidiary staffed by 13 people.

McDonald's has rejected the claims.

Ms Vestager said her office is "looking into the information gained by trade unions when it comes to McDonald's in order to assess if there is a case.''

The coalition of European and US unions claims that the company reduced its tax burden by channelling money into a Luxembourg-based subsidiary that also had a Swiss branch.

The unions said the Luxembourg offshoot had revenues of €3.7bn over the five-year period but reported paying €16m in taxes.

McDonald's maintains that it has complied fully with EU tax law.

The EU has been cracking down on what it sees as aggressive tax avoidance by multinational companies, last year opening investigations into Apple in Ireland, Starbucks in the Netherlands, and Amazon in Luxembourg.

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