McDonald's slammed for post-Brexit tax moves

McDonald's slammed for post-Brexit tax moves, photo AFP

In a report titled "Unhappier Meal", the unions railed against McDonald's for embarking on further aggressive tax practices despite an EU crackdown on tax deals struck by multinationals including the fast-food giant.

Based on a complaint by the same unions, the EU in December 2015 launched a probe into tax deals between McDonald's and Luxembourg, saying the arrangements appeared to breach state aid rules.

Since then, the maker of Big Macs and McMuffins had not improved, said the report.

The report was drawn up by three unions: the European Federation of Public Service Unions, the European Federation of Trade Unions in the Food, Agriculture and Tourism sectors and the US-based Service Employees International Union.

Since the EU probe, "McDonald's has moved from Luxembourg to ... the USA using a myriad of intermediate companies in Singapore, Hong Kong and the UK while making use of companies in the Cayman Islands, Bermuda and Guernsey," the unions said in a statement.

"The new corporate structure is so untransparent that the new tax base is currently unknown," they said.

A spokesman for the EU Commission said it "takes note" of the report but it was not part of its ongoing investigation, as it was put in place after that probe opened in 2015.

McDonald's did not respond to an email for comment.

The initial case against McDonald's stemmed from a complaint by trade unions and the charity War on Want that accused McDonald's of avoiding around one billion euros ($1.1 billion) in taxes between 2009 and 2013.

Since then, McDonald's has shifted its fiscal headquarters for some non-US operations to Britain from Luxembourg, raising alarms that the company was also seeking to benefit from Brexit.

The McDonald's case was a "worrying sign" that had to be taken "all the more seriously given that some of the main players in Brexit ... are linked to offshore activities," accused French MEP and fair tax campaigner Eva Joly.

For Joly's Greens party in European Parliament, "the EU should use the Brexit negotiations to press the UK to reform its tax system inherited from a colonial past, instead of giving it the opportunity to increase unfair tax competition," she said.