May 27, 2016
French police have searched McDonald’s headquarters outside Paris after a probe was opened for alleged aggravated tax fraud and money-laundering against the local branch of the fast-food company. The national financial prosecutor’s office said Thursday documents were seized when the tax fraud police unit searched the headquarters in Guyancourt, west of Paris, last week. Investigators suspect the burger chain of artificially reducing its profits and taxes in France through license fees and other money transfers to its European parent company in Luxembourg.
The French branch says that, like all companies operating in franchising, it pays fees to the parent company to cover rights of know-how use and transfer and that the fees can be deducted from corporation taxes due in France. It says that the level of the fee is subject to regular back and forth with the different national tax administrations, in France and in other countries where McDonald’s operates.