McDonald’s agrees to pay $1.3 bln to settle French tax dispute

The brand of a McDonald’s restaurant is seen in Bordeaux, France, June 18, 2018. REUTERS/Regis Duvignau/File Picture

PARIS, June 16 (Reuters) – McDonald’s (MCD.N) has agreed to pay $1.3 billion in fines and again taxes to settle a tax dispute in France, ending a long-running probe into whether or not the U.S. burger chain had correctly declared all of its revenue within the nation.

The case centered on allegations, which first surfaced in 2014, that McDonald’s diverted charges paid by its franchise eating places to items in different nations, thereby decreasing its taxable revenue in France.

French media reported then that the authorities had been scrutinising royalties despatched to a Luxembourg subsidiary. McDonald’s French headquarters had been searched by police in 2016 as a part of the probe.

McDonald’s attorneys stated the settlement didn’t quantity to an request for forgiveness. “It is a judicial settlement…. to keep away from a trial, which is a really lengthy and inevitably unsure course of,” lawyer Denis Chemla advised reporters.

The settlement is just like a $1 billion accord reached by Google, now Alphabet Inc (GOOGL.O), in 2019 to finish a French case the place it had additionally been accused of unfairly shifting income.

McDonald’s has 1,500 eating places in France, lots of that are franchises that pay a licensing price to McDonald’s to be used of the model, information-technology programs and restaurant ornament.

In a press release on Thursday, McDonald’s stated the fiscal settlement reached – which ends each tax and felony circumstances towards it – coated using its model and know-how for the years from 2009-2020.

It stated that over that interval the corporate had paid greater than 2.2 billion euros ($2.29 billion) of taxes in France and created nearly 25,000 jobs.

($1 = 0.9608 euros)

Reporting by Juliette Jabkhiro; writing by Silvia Aloisi; enhancing by Jason Neely and Jane Merriman

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