European Commission rule Luxembourg did not give selective tax treatment to McDonald’s but criticise company’s unfair tax practices

The European Commission has today ruled that the non-taxation of certain McDonald’s profits in Luxembourg did not constitute illegal State aid, as it is in line with national tax laws. However, the Competition Commissioner, Margrethe Vestager, did criticise the unfair tax avoidance strategies used by McDonalds and Luxembourg’s tax laws, specficically the Double Taxation Treaty with the US. These laws enabled McDonalds to avoid paying tax by registering its profits in Luxembourg, the home state of European Commission President Jean Claude Juncker.

Responding, Molly, who is a member of the European Parliament’s special committee on investigation into tax avoidance, said:

“Another day, and another household name is found to be avoiding tax. In spite of the finding that state aid rules were not broken it is clear that there is a problem with the domestic tax laws of the home country of the EU Commission President, Jean Claude Juncker.

“The complex company structure and dishonest franchising practices of McDonalds means that they avoid contributing to the public services their employees use – not to mention the additional burden caused by their unhealthy products. While President Juncker may have been ‘lovin’ it’, it is clear that the citizens of Europe cannot stomach any more of this anti-social tax avoidance by corporations who dominate their daily lives.”

Molly also welcomed news that tech giant Apple had agreed to pay €14bn in back-tax to Ireland, that was ruled to be illegal state aid. The competition commissioner announced that because of this, court action against the corporation would be closed.