McDonald's stands accused of dodging taxes to the tune of €1 billion. Photo: _Skynet/Flickr
Several labour unions and a charity have formally accused McDonald's of cheating the French tax man to the tune of up to €700 million.
The fast-food giant stands accused of siphoning off European earnings through a Luxembourg unit over a five-year period since 2009. The move is alleged to have saved McDonald's €1 billion from across its European stores.
McDonald's France is the biggest earner of the franchise for Europe - bringing in system-wide sales of €21.6 billion between 2009 and 2013. Of this, McDonald's France owes an estimated €386.2 to €713.6 million in unpaid taxes to the French tax man.
The damning allegations come from the European Federation of Public Service Unions and The Service Employees International Union - which released a lengthy report titled "Unhappy Meal
The report added that France could levy additional penalties of up to €570.9 million.
It stated that McDonald's outlets in Europe were channelling intra-group royalty payments into Swiss and Luxembourg subsidiaries, thereby paying less value-added and corporate profits tax than they would in France.
The unions, together with UK-based anti-poverty campaign group War on Want, called on the European Commission to launch an investigation.
"It is shameful to see that a multi-billion euro company, that pays low wages to its workforce, still seeks to avoid its responsibility to pay its fair share of much needed taxes to finance public services we all rely on," EPSU General Secretary Jan Willem Goudriaan said in a statement.
"Rather than supersizing profits and minimising taxes, McDonald’s should change its recipes to ensure that Corporate Citizenship is at the core of its menu."
The topic made headlines in January
2014, after French magazine L'Express revealed that tax officials already suspected the burger chain of tax avoidance in France.
"The loss for the French state is likely to be several hundred million euros," the magazine said at the time.
It added that French tax authorities searched McDonald's main office in France on October 15th, 2013.
But McDonald's "firmly" denied the report, saying it complies with "applicable laws in France" and all its franchised restaurants in the country pay corporate tax in France.
"They have paid one billion euros in company taxes since 2009," the company said.
McDonald's did confirm, however, "an information request" from French tax authorities in October, 2013.
France has over 1,300 McDonald's stores - the second highest in Europe after Germany. The chain boasts annual sales in France of just over €4.4 billion, making France the biggest earner Europe wide.