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McDonald's accused of tax-dodging in France

McDonald's golden arches
McDonald's golden arches Reuters

Burger multinational McDonald's is suspected of dodging up to 650 million euros in tax by transferring 2.2 billion euros of its takings in France to accounts in Switzerland and Luxembourg, according to a French magazine published Wednesday. The company "strongly" denies the claim.

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France is McDonald's second most profitable market after the United States to the horror of culinary nationalists and campaigners against fast food.

It has 1,300 outlets in France, of which 20 per cent operate through franchises, which operate an average of three burger bars each.

The weekly magazineL'Express claims that hundreds of millions of euros paid by the 314 franchises to the company are paid into subsidiaries opened in 2009 in Geneva and Luxembourg, allowing the company to pay tax on profits at 1.85 per cent instead of 33.3 per cent and some VAT payments.

French tax inspectors descended on McDonald's French headquarters last October, according to L'Express.

McDonald's confirms the visit took place but claims that it was a routine inspection but "strongly" denies the tax evasion charge, claiming that the franchises have paid a billion euros in France since 2009.

The French finance ministry has refused to comment on the claims.

If they are true, other European countries are likley to follow suit, since the subsidiares cover franchises throughout Europe.

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