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17 Jun, 2022 11:25

McDonald’s settles tax evasion case

The fast-food giant has agreed to a hefty fine to avoid criminal prosecution in France
McDonald’s settles tax evasion case

US fast-food chain McDonald’s will pay €1.25 billion ($1.3 billion) in France to avoid prosecution over tax evasion between 2009 and 2020, AFP reports, citing an agreement approved on Thursday by a Paris court.

It is reportedly the second-biggest tax settlement in French history, made up of a 508-million-euro fine and a €737 million in back taxes already agreed in May. It comes years after the US company was accused of reporting artificially low profits to reduce its tax bill.

“On condition of payment of the fine, the validation of the agreement means the end of the prosecution,” chief financial prosecutor Jean-Francois Bohnert said in a statement, as quoted by AFP.

According to him, the fine is the “maximum amount possible” under such a deal, and McDonald’s would pay “2.5 times the amount of tax avoided.”

McDonald’s said in a statement it had already paid €2.2 billion in taxes over the period in question.

“This agreement ends a tax case and a judicial investigation without acknowledging fault,” the company said, adding it “is working proactively with French tax authorities to agree the current and future level of brand and knowhow fees.”

French prosecutors had opened an official probe in 2016 after union officials reported the company for covering up tax evasion.

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