Infotech Accused of tax fraud, McDonald’s pays 1.25 billion euros to avoid prosecution in France

Accused of tax fraud, McDonald’s pays 1.25 billion euros to avoid prosecution in France

McDonald’s has agreed to pay 1.25 billion euros in France to avoid criminal prosecution for tax evasion between 2009 and 2020, according to an agreement validated this Thursday, June 16 by the president of the Paris court, Stéphane Noël.

This judge validated the payment by McDonald’s of a public interest fine of 508 million euros, accepted by the fast food group. McDonald’s also approved in May the payment of 737 million euros to the tax authorities to settle its corporate tax evaded by this scheme of tax evasion.

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By agreeing to sign this legal agreement in the public interest (Cjip) concluded with the National Financial Prosecutor’s Office (PNF), the most important in France to date in terms of tax evasion, the McDonald’s group thus avoids a lawsuit in France and settles its dispute with both the tax authorities and the public prosecutor. For its part, McDonald’s salutes the ” end “ of a dispute and ensured that it would make every effort to ” comply “ to laws.

The agreement represents “2.5 times the amount of tax evaded”

French justice suspects the brand, in the crosshairs of the tax authorities since 2014, of having artificially reduced its profits in France from 2009 by means of royalties for the operation of the McDonald’s brand paid to its European parent company based in Luxembourg . That “led to absorb a large part of the margins generated by French restaurants and to reduce the taxes paid in France by the various structures of the French group”noted the president of the court.

The national financial prosecutor, Jean-François Bohnert, valued the agreement reached with McDonald’s, explaining that the fine in the public interest had been set at “maximum amount that could be declared within the framework of a Cjip”. The entire agreement represents “2.5 times the amount of tax evaded” by the group, 469 million euros. For him, it’s a “real sanction, both symbolically and economically”

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This “convention confirms the particular effectiveness of the Cjip, particularly in terms of corporate taxation, where the financial penalty is the most appropriate means of responding to transnational fraud”insisted Jean-François Bohnert.

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The General Directorate of Public Finance (DGFip) welcomed the agreement in a press release, which “meets a dual requirement of tax fairness and justice”. “McDonald’s did not hesitate to pay taxes in France, 2.2 billion over the entire period”underlined Me Eric Dezeuze, lawyer for the fast-food giant.

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The criminal investigation had been opened following complaints from the Works Council of McDonald’s Ouest Parisien and the CGT McDonald’s Ile-de-France. Employees could take civil action to obtain compensation for their damage. A coalition of European and American trade unions and a British anti-poverty association hailed a “snub” for McDonald’s and a ” victoire “ for employees.

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