Unions accuse McDonald's of tax avoidance
posted on 20th May 2015
A global coalition of trade unions has funded a report which suggests that McDonald's has used 'aggressive' tax strategies to avoid paying billions of dollars in taxes each year. The report, which does not allege that the company has done anything illegal, found that McDonald's was 'well-positioned to take advantage of the international loopholes and mismatched tax regimes that allow companies to pay very low tax rates on royalty income.' Read the full report. The report singles out Australia for one of its case studies, suggesting that the company could have reduced tax payable by almost A$500 million in that country.
"McDonald's uses royalty payments from franchisees and foreign subsidiaries in major markets to route profits to tax havens," the report states. "These strategies may have allowed it to avoid up to US$1.8 billion (NZ$2.4m) in tax in those markets in the years between 2009 and 2013, including €1 billion (NZ$1.5b) across Europe and A$497 million (NZ$535m) in Australia."
A spokeswoman for McDonald's said: "We have always been committed to paying our fair share of tax in Australia. In fact, over the past five years, McDonald's Australia has paid in excess of $500 million in tax."
But the report suggests the company's Australian operations show an "unusually high level of inter-company payments over the five years" had gone to the low-tax nation of Singapore.
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