EU Says McDonald's Tax Arrangement in Luxembourg is Legal, Drops Probe
19 September 2018 - 8:23PM
Dow Jones News
By Emre Peker
BRUSSELS--European Union regulators said Wednesday that
McDonald's Corp.'s (MCD) tax arrangement in Luxembourg is legal,
dropping an investigation against the U.S. fast-food giant, in
contrast with the barrage of fines it has levied on American tech
firms.
Luxembourg's decision not to tax McDonald's is in line with a
double-taxation treaty between Luxembourg and the U.S, and does not
constitute favourable treatment, according the European
Commission--the EU's executive arm and competition authority. The
commission launched its probe in December 2015.
"Our in-depth investigation has shown that the reason for double
nontaxation in this case is a mismatch between Luxembourg and U.S.
tax laws, and not a special treatment," European Competition
Commissioner Margrethe Vestager said in a statement.
Luxembourg is taking steps to prevent double nontaxation of
companies, as in the McDonald's case, and has drafted legislation
to amend its tax code, according to the commission. Ms. Vestager
welcomed the move "to address the issue that arose in this case and
avoid such situations in the future."
The decision to drop the case against McDonald's comes on the
heels massive tax fines of 13 billion euros ($15.16 billion) on
Apple Inc. (AAPL) and some EUR250 million on Amazon.com Inc (AMZN)
over the last year as the EU cracked down on what the commission
argues are sweetheart deals.
Since October 2015, Brussels has also targeted Starbucks Corp.'s
(SBUX) tax deal with the Netherlands, ordered Belgium to recoup
about EUR900 million from 35 mostly European companies and slapped
French utility Engie SA (ENGI.FR) with a EUR120 million bill for
undue tax benefits granted by Luxembourg.
Write to Emre Peker at emre.peker@wsj.com
(END) Dow Jones Newswires
September 19, 2018 06:08 ET (10:08 GMT)
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