LONDON – McDonald's didn’t get any unlawful state aid from Luxembourg, the EU said as it concluded a three-year-old probe with a rare reprieve amid its ongoing crackdown on unfair fiscal deals for multinational firms.
The Big Mac maker escapes the fate of other US giants ordered to repay EU nations back taxes deemed to be unfair state aid, after the European Commission said yesterday that “the non-taxation of certain McDonald’s profits in Luxembourg” didn’t clash with the EU’s tough rules curbing government subsidies.
“Our in-depth investigation has shown that the reason for double non-taxation in this case was a mismatch between Luxembourg and US tax laws, and not a special treatment by Luxembourg,” EU competition commissioner Margrethe Vestager said in a statement.
“Therefore, Luxembourg did not break EU state aid rules.” Luxembourg has already faced three negative decisions amid the EU crackdown, being ordered in June to recoup €120 million (R2.09bn) from French energy utility Engie SA, and in 2017 to reclaim €250m from Amazon.com over selective tax benefits granted to the US tech company.
The tax announcement comes just over two years after Apple was handed a record multibillion-euro tax bill over its revenue arrangements in Ireland.EU officials have often described the McDonald’s case as challenging, because they had to take account of double-tax and other international treaties.
Vestager says she is standing up for fairness by cracking down on special tax deals that benefit only a select few companies.