McDonald’s agrees to pay France $1.3 billion over tax evasion

McDonald's.

McDonald’s has agreed to pay France €1.25 billion (around $1.3 billion) to settle a case that accused the fast-food giant of a decade of tax evasion, the office of France’s financial prosecutor said Thursday.

This includes a public interest fine of €510 million ($530 million), it said, alongside €737 billion ($776 billion) for unpaid taxes between 2009 and 2020, The Times reported.

In total, McDonald’s will be paying two-and-a-half times more than the amount of taxes it skipped, France’s financial prosecutor Jean-François Bohnert said, according to Bloomberg.

Bohnert said that this was the biggest settlement in French legal history and the maximum fine allowed under French law, according to The Times.

The lawsuit alleged that McDonald’s transferred the fees it received from French franchises to a unit in Luxembourg, allowing it to lower its French tax bill, according to The Times. The allegations first appeared in 2014, Reuters reported.

Eric Dezeuze, McDonald’s lawyer in the case, rejected the allegations of tax fraud and said that the fast-food chain had paid €2.2 billion ($2.32 billion) in tax in France between 2009 and 2020, The Times reported.

McDonald’s Corporation issued a statement saying “For the last several years, McDonald’s has conducted discussions with relevant tax administrations and public authorities in France regarding historic tax methodologies. Based on those productive discussions, McDonald’s has reached an agreement with the French authorities regarding a tax framework covering the period of 2009-2020.”

Over that time period, the company and its franchisees paid corporate income tax of more than €2.2 billion in France and created nearly 25,000 new jobs, the statement said.

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