BERLIN: McDonald’s seemed to have channeled money through Luxembourg and skirted about 1.2 billion dollars (around 1 billion Euros) in corporate taxes for a period of five years, from 2009 to 2013.
The report, titled ‘An Unhappy Meal’ explains how McDonald’s re-structured its business in 2009 to benefit from the tax policy change in Luxembourg.
This policy was introduced in 2009 and allows companies to ‘benefit from significant reductions of tax rate on income earned from intellectual property’. In the same year, McDonald’s shifted its European headquarters from The United Kingdom to Switzerland and then allegedly re-routed millions in tax dollars through a Luxembourg based subsidiary.
Europe is one of the largest markets for McDonald’s and according to the report, in 2013 it accounted for 40 percent of the global operating profit (mainly Italy, Germany, United Kingdom (UK), France and Spain). But the economic disparity between McDonald’s earnings and the European economy couldn’t have been farther apart.
Since the 2007-08 recession, McDonald’s has grown by nearly 20 percent while Europe is on the brink of its third recession in 6 years. On one hand, Europe struggles with severe austerity measures which usually affect the weaker, more vulnerable sections of society, and on the other hand McDonald’s have implemented structures that allow them to evade taxes.
