French tax force unit raid headquarters of McDonalds in France

EPA/JUSTIN LANE

McDonald’s confirmed the search and said in a statement that it was “cooperating fully with the authorities on this matter.”

A French prosecutor said that the authorities are looking into allegations of aggravated tax fraud and money laundering


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The headquarters of McDonalds in France were raided by a specialised French tax force unit, according to a French police statement on May 25.

The French prosecutor office said on Thursday that the investigators raided the headquarters of the company on May 18, because they are currently looking into allegations of aggravated tax fraud and money laundering.

McDonald’s confirmed the search and said in a statement that it was “cooperating fully with the authorities on this matter.”

Authorities suspect that McDonalds has been illegally lowering its tax bill in France by sending the national earnings to Luxembourg, where its European headquarters is based, and where corporate taxes are much lower.

In December 2015, the European Commission also announced that McDonalds Corp. is the subject of a tax avoidance probe. British daily, The Financial Times reported then that the Commission believes that Luxemburg has allowed McDonalds Europe to pay no corporation tax since 2009.

In April, French business monthly magazine L’Expansion reported that the French Finance Ministry asked from the US based company to pay €300 million for unpaid taxes at the end of 2015.

McDonald’s are very popular in France and the French market is considered the most lucrative one behind the US, for the well-known fast-food company. The company has more than 73,000 employees in France and its annual sales are well over €4 billion.

New York Times, reported in December that Eva Joly, a leading Green Party official in France, brought a lawsuit on behalf of the McDonalds workers’ council in France. The union accuses the company of understating its earnings to avoid a legal obligation to share profits with employees.

In February 2015, a coalition of trade unions said that McDonald’s had avoided about €1 billion in taxes by using the Luxembourg scheme. Moreover it accused the company of offering “low-wage work with little prospect for steady employment or advancement,” not contributing to sustainable employment.

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