SHARE
COPY LINK

FOOD & DRINK

French taxman comes for McDonalds with €1.25 billion bill

McDonald's will pay €1.25 billion in France to avoid a legal case over tax evasion between 2009 and 2020, under an agreement approved Thursday by a Paris court.

French taxman comes for McDonalds with €1.25 billion bill
A McDonald's drink container with 'Merci' (Thanks) on it in Lille, northern France. (Photo by Philippe HUGUEN / AFP)

 Judge Stephane Noel confirmed the second-biggest tax settlement in French history, made up of a 508-million-euro fine and 737 million euros in back taxes already agreed in May, years after McDonald’s was accused of reporting artificially low profits to reduce its tax bill.

“On condition of payment of the fine, the validation of the agreement means the end of the prosecution,” chief financial prosecutor Jean-Francois Bohnert said in a statement.

Hailing the fine as the “maximum amount possible” under such a deal, he added that McDonald’s would pay “2.5 times the amount of tax avoided”.

Investigators had since 2014 been probing whether fees paid by McDonald’s French operation to its European parent company in Luxembourg for use of the chain’s brand in fact served to artificially slash its profits.

These let the company “soak up a large amount of the profits made by restaurants in France,” judge Noel said. 

A source familiar with the case told AFP this week that such practices within the same group are “used exclusively to avoid taxes”.

They added that the brand fees “could double” from one McDonald’s branch to the next “without any justification at all, which made it possible to prove that it was done ‘exclusively’ for tax reasons”.

Prosecutors had opened an official probe in 2016 after union officials reported the company for covering up tax evasion.

In a statement, McDonald’s said it had already paid 2.2 billion euros in taxes over the period in question.

“This agreement ends a tax case and a judicial investigation without acknowledging fault,” the company added.

“McDonald’s France is working proactively with French tax authorities to agree the current and future level of brand and knowhow fees,” it said.

France’s biggest-ever tax fine dates to 2020, when aircraft builder Airbus had to cough up 2.1 billion euros.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

FOOD & DRINK

France introduces stricter wine rules for restaurants, bars and cafés

The French government has introduced stricter wine rules for restaurants, bars and cafés, which must now display full information on the origins of all wines they serve.

France introduces stricter wine rules for restaurants, bars and cafés

If you’re ordering a bottle of wine it’s likely that the menu will state where the wine comes from, but previously this was not always the case for wines bought by the glass or carafe.

Most French cafés and restaurants offer wine by the glass as well as pitchers or carafes or various sizes, which are also sometimes referred to as un pot, particularly in the east of France.

Thanks to a new law that came into effect on July 24th, if you order any of these, the bar or restaurant is obliged to display full information on where the wine comes from, and its protected geographical origin (AOP) if it has one.

Any establishments that sell wine – whether for consumption on or off the premises – must display the information in full and in writing. Failure to do so makes them liable to a €1,500 fine. 

The law is a revision of the Loi relative à la transparence de l’information sur les produits agricoles et alimentaires, which came into force in 2020 and is intended to protect French farmers and producers.

French vocab

Une bouteille de vin rouge, s’il vous plaît –  a bottle of red wine, please

Une bouteille de vin blanc – a bottle of white wine

Un pichet de vin rosé – a pitcher of rosé wine

Une carafe de vin – a pitcher of wine

Pichet and carafe are just different words for the same thing, and if you want tap water (as opposed to mineral water) with your meal, ask for un pichet d’eau or une carafe d’eau. Carafes usually come in varying sizes, the most common being 50cl or 25cl.

Cinqante centilitres – 50cl, or two thirds of a bottle

Vingt-cinq centilitres – 25cl, or one third of a bottle

Un pot lyonnais – if you’re in or around Lyon, you might see wine listed on the menu as by the pot – this comes in a carafe that is shaped like a small bottle with a very thick glass bottom. The classic pot lyonnais holds exactly 46 centilitres, or just over half a bottle  

Un verre de vin rouge – a glass of red wine 

Encore de vin, s’il vous plaît – another wine, please (the ‘encore‘ lets your server know that you want another glass/bottle/pitcher of the same wine)

Vin bio – organic wine

Vin naturel – wine produced by ‘natural’ methods 

Bio, natural or biodynamic: 5 things to know about organic wine in France

Qui va goûter? – Who will taste? The standard question that your server will ask when they bring the bottle of wine to your table

Un pot-de-vin – a bribe. Not a wine term as such, but if you hear reference to un pot-de-vin it means a bribe. These days bribes are usually paid in cash, but the origins of the term are pretty clear.

SHOW COMMENTS