Coalition of trade unions and anti-poverty group calls on the European Union and its Member States to strengthen legal tools against corporate tax avoidance.
On Wednesday, 19 September 2018, the European Commission announced that arrangement between McDonald’s and Luxembourg, which allowed the fast food company to pay almost no tax on its European royalties in both the EU and US, did not break the EU’s laws.
When unveiling the decision earlier this week, EU Competition Commissioner Margrethe Vestager nonetheless stressed that “Of course, the fact remains that McDonald’s did not pay any taxes on these profits — and this is not how it should be from a tax fairness point of view.”
In the wake of the Commissioner’s announcement, a Coalition of European and American trade unions representing 15 million workers globally, joined by the UK anti-poverty campaign group War on Want, is urging the European Union and its member states to reform its corporate tax rulebook to ensure that multinationals like McDonald’s do pay their fair share of tax.
McDonald’s tax structure could still be investigated by national tax authorities and tackled where possible with tax avoidance tools such as the General Anti-Abuse Rules (GAAR). The estimate of taxes that national authorities could recover from McDonald’s if they apply GAAR has been assessed to equal €1.5 billion for the 2009-2015 period, according to a 2016 report by the Coalition.