The fast food chain, McDonald’s, is to be investigated by the European Commission (EC) as part of a “formal probe” into Luxembourg’s tax treatment of the company.
The EC’s “preliminary view” is that a tax ruling granted by Luxembourg may have given McDonald’s a favourable tax treatment in breach of EU state aid rules.
“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,” said European Commissioner Margrethe Vestager, who is in charge of competition policy.
“The purpose of double taxation treaties between countries is to avoid double taxation – not to justify double non-taxation.”
McDonald’s in the UK is a strong supporter of British pork, being praised earlier this week by the National Pig Association for “demonstrating that it makes good business sense to source British pork, because that’s what customers want”.