McDonald’s has agreed to pay more than a billion euros in fines in France to avoid criminal prosecution for tax evasion, as part of an agreement which must still be validated Thursday morning by French justice, learned the Agence France-Presse (AFP), Wednesday June 15, from concordant sources.
This fine, proposed by the National Financial Prosecutor’s Office (PNF) within the framework of a legal agreement in the public interest (CJIP), must be approved by a judge of the seat and “exceeds one billion euros”according to one of these sources, partially confirming information from several media.
His payment would allow the fast food giant to avoid prosecution after a preliminary investigation started in 2016. Asked by AFP, neither the PNF nor McDonald’s commented on this information.
French justice suspects McDonald’s, in the crosshairs of the French tax authorities since 2014, of having artificially reduced its profits in France by means of royalties paid to its European parent company based in Luxembourg.
A preliminary investigation had been opened in early 2016 by the PNF, after the filing of a complaint by union officials against McDonald’s France for “laundering tax evasion in an organized gang”.
“Dissuasive fine”
The fine mentioned is “Colossal”, greeted the former anti-corruption magistrate Eva Joly, who became a lawyer for these complainants, with her daughter Caroline Joly. The two lawyers clarified their hope that the CJIP would be approved on Thursday, “a makeshift” acceptable in view of “the state of congestion of French justice”. “The size of the fine is a deterrent” and risk of “changing the practices of large groups” in terms of transfer pricing, also welcomed Eva and Caroline Joly, reached by telephone.
The CGT McDonald’s Paris and Ile-de-France welcomed in a press release a “historic victory”. The system in question makes employees “double victims”however, they noted:
As workers, we cannot reap the fruits of our labor; as citizens, we check out to pay the tax that McDonald’s doesn’t pay.
Their lawyers specified that the employees could act “within the framework of the civil courts” to obtain compensation for their damage.
In September 2018, the European Union deemed the advantageous tax treatment granted by Luxembourg to McDonald’s legal, thus sparing the king of the Big Mac, unlike other American giants, such as Apple, condemned to reimburse unpaid taxes.
McDonald’s France was raided in May 2016 at its headquarters by investigators from the Central Office for the Fight against Corruption and Financial and Tax Offenses (OCLCIFF). Several former senior leaders of the group had been placed in police custody in early 2021.