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NPR reports EU Investigating Tax Deal Between Luxembourg, McDonald's:
European regulators have launched an investigation into Luxembourg's tax treatment of McDonald's, saying the fast-food giant's franchise office has paid virtually no taxes on franchise profits it earned in Europe and Russia since 2009.
It's the latest in a series of investigations into corporate tax avoidance schemes by the European Commission, which has also targeted Starbucks and Apple.
"A tax ruling that agrees to McDonald's paying no tax on their European royalties either in Luxembourg or in the U.S. has to be looked at very carefully under EU state aid rules," said Commissioner Margrethe Vestager, who heads the European Commission's competition bureau.
Regulators say authorities in Luxembourg, where McDonald's Europe Franchising office is located, determined in March 2009 that the company should be exempt from corporate taxes because its profits were also taxed in the United States.
The company was required to submit proof every year that it actually paid US taxes on its profits, according to the statement. It stated:
"However, contrary to the assumption of the Luxembourg tax authorities when they granted the first ruling, the profits were not to be subjected to tax in the US. While under the proposed reading of Luxembourg law, McDonald's Europe Franchising had a taxable presence in the US, it did not have any taxable presence in the US under US law."
A subsequent ruling by Luxembourg in September 2009 said McDonald's no longer even had to submit proof it was paying U.S. taxes.
Since then, the company has paid no taxes on virtually all of its European income, despite hefty profits of 250 million euros in 2013 alone, the E.C. said. Investigators will determine whether this gave McDonald's an unfair advantage over its competitors, violating European law.
In a statement e-mailed to NPR, McDonald's said the allegations it paid no taxes are untrue:
"McDonald's complies with all tax laws and rules in Europe and pays a significant amount of corporate income tax. In fact, from 2010-2014, the McDonald's Companies paid more than $2.1 billion just in corporate taxes in the European Union, with an average tax rate of almost 27%.
Previously: Leaked Documents Expose Companies' Secret Tax Deals in Luxembourg
Multinationals Hiding more than USD$500 Billion from G20 Tax Collectors
(Score: 1, Troll) by jdavidb on Saturday December 05 2015, @01:38AM
Tax avoidance is legal [wikipedia.org] and I condone it, even though regimes like the U.S. want you to think no matter where you go, once you are theirs you owe them taxes for eternity. Less taxes means less funding for the killing machine, less blowback, less war on drugs, less of all sorts of crap.
Let us hope that the tax credit will return in full force. And then we can revive the lost tactic, not of "closing the loopholes," but of ever-widening them, opening them so widely for all indeed, that everyone will be able to drive a Mack truck through them, until that wondrous day when the entire federal revenue system will be one gigantic loophole. [lewrockwell.com]
ⓋⒶ☮✝🕊 Secession is the right of all sentient beings
(Score: 0) by Anonymous Coward on Saturday December 05 2015, @02:08AM
Tax avoidance is more effective if you're a professional tap dancer. Those fuckers do whatever they please.
(Score: 4, Insightful) by Runaway1956 on Saturday December 05 2015, @03:17AM
Well, we seem to be diametrically opposed in our view on taxes.
McDonald's profits quite a lot on our city, state, and federal highway systems. I expect McDonald's to pay for the wear and tear on those systems.
McDonald's profits from our electrical infrastructure. I expect McDonald's to pay for some of that.
McDonald's profits from our police forces. I expect McDonald's to carry part of the burden for providing those police forces.
Every time I read or hear about megacorporations sheltering their profits so that they don't pay taxes, I want to grab all the CEO's and board members, and choke their dumb asses. The bastards OWE those taxes, no matter how imaginatively they spend their bribe money. Similarly, I want to shoot all those idiot bastards who are busy moving manufacturing from the developed world to China and the undeveloped third world.
(Score: 2) by jdavidb on Saturday December 05 2015, @03:37PM
ⓋⒶ☮✝🕊 Secession is the right of all sentient beings
(Score: 3, Insightful) by Runaway1956 on Saturday December 05 2015, @03:57PM
So then, what would "slightly less quality" entail? Instead of a bridge falling into a river once every decade, we accept two each decade? Infrastructure is expensive, even if you settle for cheap. And, cheap costs lives. So, how many lives is it worth for Mickey D not to pay taxes? And, Monsanto, and General Electric, and ConAgra, and - well, you should be getting the idea. If corporations aren't paying any taxes, how many lives is it worth?
(Score: 2) by jdavidb on Sunday December 06 2015, @04:45AM
ⓋⒶ☮✝🕊 Secession is the right of all sentient beings
(Score: 1) by khallow on Saturday December 05 2015, @05:59PM
McDonald's profits quite a lot on our city, state, and federal highway systems. I expect McDonald's to pay for the wear and tear on those systems.
McDonald's profits from our electrical infrastructure. I expect McDonald's to pay for some of that.
McDonald's profits from our police forces. I expect McDonald's to carry part of the burden for providing those police forces.
And they do pay for these things. But (to use some US-centric examples) why should anyone be bothered to pay $400 billion for fighter jets (the F-35) which don't work as advertised? Last I heard, the full extent of repairs needed for road systems in their entirety was on the order of a trillion dollars. Well, I think we could have redirected a little of that fighter jet money to road system, but we didn't. Or inefficient and ineffective public entitlements like Social Security or Medicare/Medicaid. Tax avoidance keeps more of our economy out of the morass of corruption and incompetence that are governments.
(Score: 2) by Runaway1956 on Saturday December 05 2015, @07:25PM
I can't - don't even want to - argue your point regarding the military industrial complex. But, really, that is a separate issue.
Issue 1 is "ducking tax responsibility"
Issue 2 is "wasting money on unnecessary defense spending"
Issue 3 is "fraudulent military industrial complex billing"
I can't simply excuse issue 1 because issues 2 and 3 exist. On a personal level, that is rather like,
Gary is a thief
Bill is a wife abuser
Bill is a drug addict
Because Bill is a drug addict, we should just dismiss the theivery and spousal abuse? I hardly think so. Not even if Gary stole something from Bill should we excuse the theivery.
(Score: 1) by khallow on Saturday December 05 2015, @10:19PM
(Score: 0) by Anonymous Coward on Saturday December 05 2015, @03:53AM
(Score: 0) by Anonymous Coward on Saturday December 05 2015, @05:26AM
They are simply following the laws the governments have written. What do you want them to do, voluntarily pay more taxes than the law requires?
(Score: 0) by Anonymous Coward on Saturday December 05 2015, @02:24PM
(Score: 3, Insightful) by Runaway1956 on Saturday December 05 2015, @03:00PM
You seem to have a somewhat simplistic view of government, and you believe government to be equally simple. Government didn't just write those laws that the mega-corps are taking advantage of. Instead, the mega-corps PAID FOR those laws. It's called bribery, and that is an offense that is punishable by law in almost all western societies. Bribery is accepted and expected in many other cultures and societies, but western society frowns upon bribery. In fact, we think bribery is such a low offense, that our government has laws to punish people for engaging in expected bribery when they travel overseas. Yet, a gaggle of rich bastards can dispatch hordes of "lobbyists" to Washington to purchase whichever laws they want purchased.
Can you begin to see the hypocrisy here?
(Score: 2) by jdavidb on Saturday December 05 2015, @03:38PM
ⓋⒶ☮✝🕊 Secession is the right of all sentient beings
(Score: 2) by gnuman on Saturday December 05 2015, @05:58PM
Less taxes means less funding for the killing machine, less blowback, less war on drugs, less of all sorts of crap.
I think you are confusing taxes and wars. One has little to do with the other. Taxes don't fuel wars - people's ambitions and perceptions fuel wars. Are wars in Congo that killed millions fueled by taxes? No. How about Libya? Taxes? Don't think so.
Was US war in Iraq fueled by taxes? HELL NO! It was fueled by Bushism and loans..
Was WWII fueled by taxes?? .... right.. no.
Last time governments had to raise taxes to pay for armies was back before effective governments existed, you know, middle ages in europe, where wars were constant. And if you think "tax avoidance" fixes this, you are sorely mistaken.
(Score: 1) by khallow on Saturday December 05 2015, @10:27PM
Are wars in Congo that killed millions fueled by taxes? No.
It seems strange that you would claim the answer is "no". Ambition and perception doesn't create weapons or the other logistics you need to maintain an army.
(Score: 2) by jdavidb on Sunday December 06 2015, @04:50AM
ⓋⒶ☮✝🕊 Secession is the right of all sentient beings
(Score: 2) by shortscreen on Sunday December 06 2015, @12:22AM
When did the feds ever let lack of revenue prevent them from doing a thing that they wanted to do? They might use that as an excuse to cut things that they never really cared about in the first place, but they certainly aren't shy about taking on more debt to fund eg. the Iraq war.