McDonald's May Be Next To Face EU Tax Probe

The EU's competition commissioner has raised the prospect of an expanding a corporate tax investigation to McDonald's.

Magrethe Vestager said officials were considering whether an inquiry was warranted following claims by campaigners and unions of an alleged deal with Luxembourg that allowed the fast-food chain to massively reduce its tax bill on European sales.

It would add to investigations already taking place concerning Luxembourg's tax arrangements with Amazon and Fiat .

The probes are particularly embarrassing for Jean-Claude Juncker, the president of the European Commission, who was the duchy's prime minister at the time alleged tax deals were made.

The EU had also previously confirmed tax investigations into Apple in Ireland and Starbucks in The Netherlands.

Brussels believes some tax breaks offered to big companies breach the bloc's rules on state aid, amounting to an unfair subsidy which puts other companies at a disadvantage.

The latest case follows the publication of a report in February by the British pressure group War On Want which claimed McDonald's funnelled billions of euros of franchise sales from EU nations, including Britain, into its Luxembourg holding company between 2009 and 2013.

The report concluded that €16m was paid in tax.

It added that if tax had been paid in the country where the sales were made, the fast-food firm would have had to pay a total €1.05bn in tax.

McDonald's rejected the allegations contained in the dossier, insisting it complied fully with existing tax law and paid its dues.