Falsified balance sheet allegation: McDonald’s escapes trial with billions-dollar payment

Accusation of false financial statements
McDonald’s escapes the lawsuit with billions in payment

McDonald’s is said to have systematically smuggled the royalties past the tax authorities. The fast food giant has been under investigation for years in France. With a billion in payment, the group is now preventing a possible trial, but without “acknowledging the blame”.

Fast food group McDonald’s pays 1.25 billion euros in France and thus avoids a tax process. Under the deal, accepted by a Paris court, McDonald’s will pay 737 million euros in back taxes in addition to 508 million euros. The company was accused of reporting artificially low profits between 2009 and 2020 in order to reduce the tax burden.

Investigators from the financial prosecutor’s office had investigated the suspicion that the royalties McDonald’s France paid to its European parent company in Luxembourg for using the chain’s branding may have served to artificially reduce profits.

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In early 2016, the financial prosecutor had already launched preliminary investigations after union representatives filed a lawsuit against McDonald’s France for organized tax fraud. According to information at the time, this was an annual amount of 75 million euros. With the comparison, the investigations are now closed.

McDonald’s is one of several multinationals investigated in Europe for allegedly transferring profits or tax avoidance. McDonald’s welcomed the deal ending the “no-fault” tax case. At the same time, the company specified that it had already paid 2.2 billion euros in taxes in the period under review.

France is one of the countries where McDonald’s enjoys great popularity. According to the company’s French website, there are around 1,500 restaurants. Most of these restaurants are franchises, paying a license fee to McDonald’s for brand use and for things like data systems, restaurant decor, and staff training.

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