It's a salty addition.

Fast food giant McDonald's has agreed to pay 1.25 billion euros in France and thus escapes criminal prosecution for tax evasion between 2009 and 2020.

The president of the Paris court, Stéphane Noël, validated, Thursday, June 16, the payment by McDonald's of a fine of public interest of 508 million euros, accepted by the fast food group. 

During this hearing, it was announced that McDonald's had 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.

This legal agreement of public interest (Cjip) concluded with the National Financial Prosecutor's Office (PNF) is the most important in France to date in terms of tax evasion.

McDonald's welcomed the "end" of a dispute "without admission of fault" and assured "everything to do to comply with the laws".

The multinational had provisioned $500 million in its accounts for the first quarter of 2022.

Under tax surveillance since 2014

The preliminary investigation was opened by the PNF in January 2016 following complaints from the McDonald's Ouest Parisien works council and the CGT McDonald's Île-de-France, and entrusted to investigators from the Central Office for the Fight against corruption and financial and tax offenses (Oclciff).

During more than six years of investigations, justice has established that the restaurant chain, in the crosshairs of the tax authorities since 2014, had artificially reduced, from 2009, its profits in France by means of royalties for the exploitation of the McDonald's brand paid by the restaurants to the European parent company based in Luxembourg.

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This "led to absorbing a large part of the margins generated by French restaurants and to reducing the taxes paid in France by the various structures of the French group", noted the president of the judicial court.

The fine set at its "maximum amount" 

The national financial prosecutor, Jean-François Bohnert, stressed that the public interest fine had been set at the "maximum amount" possible. 

The whole agreement represents "2.5 times the amount of tax evaded" by the group, 469 million euros, according to him, or a "real sanction, both symbolically and economically".

This agreement does not provide for a compliance program, a complementary measure to the public interest fine practiced when the facts concern corruption.

But "McDonald's is in the process of negotiating a prior transfer pricing agreement with the various countries concerned to ensure or regulate the way in which these royalty rates" questioned in the context of this procedure "will be established in the future" , underlined Antoine Jocteur-Monrozier, deputy prosecutor of the PNF.  

The general direction of public finances (DGFip) welcomed, in a press release, an agreement which "responds to a double 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 Éric Dezeuze, lawyer for the fast-food giant.

The CGT McDonald's Paris and Île-de-France had applauded a "historic victory" over a system that allowed McDonald's "to avoid the allocation of employee participation bonuses, in the absence of profits, and not to pay the tax which the brand should have paid."

 With AFP

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