The Chain Gang

McDonald’s Is About to Have Major Tax Trouble in Europe

Trouble. Photo: Bertrand Guay/AFP/Getty Images

McDonald’s has been accused of evading taxes on more than $1 billion, and EU antitrust regulators are set to take a long, hard look at the company’s practices. Two insiders tell The Wall Street Journal and Reuters that the European Commission could announce an “in-depth probe” as early as today to establish whether the chain’s comfortable situation in known tax haven Luxembourg violates EU tax law. Earlier reports have said the chain uses a loophole to pay tax rates as low as 1.4 percent.

McDonald’s is the fourth U.S. company caught in the EU’s tax-dodger dragnet, and the Treasury Department has actually now jumped in to express “concern” that American companies are being bullied. Starbucks, a previous target, got a bill in October for $34 million — an amount the coffee giant obviously sneezes at. (Starbucks plans to appeal.)

In this McDonald’s case, it’s not clear exactly how much it’d owe if regulators cry foul, but the Journal says the amount would be “significant.”

[WSJ, Reuters]

McDonald’s EU Tax Troubles Get Worse