McDonald's French HQ raided in tax probe: Police

A McDonald's logo in Paris, France, on March 1, 2016.
A McDonald's logo in Paris, France, on March 1, 2016. PHOTO: REUTERS

PARIS (AFP) - French police said on Thursday they had raided the French headquarters of McDonald’s and seized documents last week as part of an investigation into tax fraud.

Agents of a special corruption, financial and tax crime unit searched the premises west of Paris on May 18, taking away company files, a police source said.

French authorities suspect McDonald’s has been illegally lowering its tax bill by channelling French earnings to Luxembourg, where its European headquarters is based, and where corporate taxes are much lower.

Financial prosecutors opened a preliminary inquiry into McDonald’s France at the start of this year, after union representatives from 16 restaurants with 900 workers in the western Paris region filed a legal complaint against the fast food chain for organised tax evasion.

McDonald’s France told AFP on Thursday it had “spoken at length on the issue” in the past and had “nothing to add at this stage.”

Unions, meanwhile, said McDonald’s had made its workers suffer through its financial manoeuvres.

This led to “no corporate taxes and no bonuses for workers,” said Gilles Bombard, the general secretary of the leading CGT trade union of McDonald’s workers.

Last month, business magazine L’Expansion had said that French authorities sent McDonald’s a 300-million-euro (S$460 million) bill for unpaid taxes, 100 million of which consisted of fines.

It said the company had 73,000 workers in France spread over nearly 1,400 restaurants.

News of the McDonald’s raid comes just two days after French police and two dozen computer experts stormed Google’s Paris offices, also in a tax fraud probe.

The US Internet giant was already suspected of owing 1.6 billion euros  in back taxes.

Several multinational firms have come under fire recently for paying extremely low taxes by shifting revenue across borders in an often complex web of financial arrangements.

In the face of growing public outrage, authorities in the United States and several European countries have begun cracking down on these so-called “tax optimisation” practices thought to rob their coffers of large sources of potential revenue every year.

Google chief executive Sundar Pichai defended the Internet giant’s tax practices during a visit to Paris in February.

“We’re a global company. We have to abide by tax laws everywhere, we do abide by local tax laws in every single country,” he said.

“We’re advocating strongly for a simpler global tax system,” he added.

Google’s European operations are headquartered in Ireland, which has some of the lowest corporate tax rates in Europe.