Brussels rules out that McDonald's received a tax favor favor from Luxembourg

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Brussels rules out that McDonald's received a tax favor favor from Luxembourg



The European Commission accepts that the agreements signed between the US and the Grand Duchy respected the treaties against double taxation




   The European Commission (EC) acknowledged on Wednesday that the fast food giant McDonald's did not receive selective tax treatment from Luxembourg that would involve illegal state aid, according to the results of an in-depth investigation opened in 2015.

"The Commission has found that the non-imposition of certain McDonald's profits in Luxembourg did not lead to illegal state aid, as it is in line with national tax laws and the double taxation treaty between Luxembourg and the United States," the EC said. it's a statement.

Brussels investigated whether under the EU rules on State aid the double non-imposition of certain McDonald's benefits was due to the fact that Luxembourg was not adequately applying its national legislation and the aforementioned agreement with the United States, in favor of the multinational.

"It is not illegal state aid," European Competition Commissioner Margrethe Vestager stressed at a press conference, adding that this double non-imposition is due to a "mismatch" between the tax regulations of both countries.

Vestager pointed out that "the fact remains that McDonald's did not pay any tax on these benefits, and that is not what it should be from a tax impartiality point of view." "That is why I am pleased that the Government of Luxembourg is taking legislative steps to address the problem that arose in this case and to avoid such situations in the future," he added.

Exempt from corporate taxes


The Luxembourg authorities granted to the franchise structure of the firm in Europe (McDonald's Europe Franchising) a first advantageous tax pact ("tax ruling") that confirmed that the company did not have to pay corporate taxes in that country, since the benefits would be subject to taxation in the United States, in application of the aforementioned agreement between both countries.

In September 2009, they approved a second advantageous tax pact according to which McDonald's Europe Franchising was no longer required to prove that its royalty income was subject to the US tax system, something the company was previously obligated to do.

Following its investigation, the EC concluded that Luxembourg did not erroneously apply the double taxation agreement with the US and that the tax advantage given to McDonald's could not be considered as state aid

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