Read on-line: http://www.world-psi.org/en/golden-dodges-mcdonalds-18-billion-global-tax-avoidance-strategy-revealed Geneva, 19 May - Today a coalition of global trade unions formed by Public Services
International (PSI), the International Union of Foodworkers (IUF) and the Service Employees
International Union (SEIU), released a report
about McDonald's global tax avoidance strategy.
In this document, the coalition reveals
how McDonald’s has taken advantage of corporate tax loopholes to avoid paying
up to US$1.8 Billion in tax between 2009 and 2013 including 1 billion Euros in
Europe and AU$497 million in Australia.
McDonald’s has 36,000 stores serving
approximately 69 million customers a day globally. In 2014, it had US 87.8
billion in system-wide sales, nearly twice the sales of its largest competitor.
It is not only the world's largest fast food company but also the largest
franchiser. The report outlines how McDonald’s uses its franchising model
to generate much of its revenue through royalty payments rather than through
direct store operations. Much of the royalty payments are then passed through
to offshore tax subsidiaries in tax havens.
Indeed, McDonald’s operates an extensive
network of hidden subsidiaries in tax havens. The report shows that McDonald’s
owns 42 subsidiaries and branches in tax havens, far above the 11 tax haven
subsidiaries the company publically disclosed in 2014.
More importantly, McDonald’s has large
cash holdings in these subsidiaries, including over US$ 1.9 billion in the tiny
state of Luxembourg. Between 2009 and 2013, the Luxembourg-based
structure, which employs 13 people, registered a cumulative revenue of €3.7
billion, on which it reported a meager €16 million in tax.
McDonald’s' scheme has attracted the
attention of tax authorities across the world. Investigations has been
initiated in at least six countries since 2005 and the European Union is
currently looking into McDonald’s' tax arrangements in Luxembourg.
Today, global trade unions call for
governments around the world to further investigate McDonald’s tax arrangements
and share information between countries. They also call for more human capital
in tax agencies to give regulators the necessary resources to recover unpaid
corporate tax.
“There is no excuse for governments
to cut public services like health and education when they let companies like
McDonald’s shift billions of dollars in taxes offshore”, Public Service
International General Secretary, Rosa Pavanelli said today.
“Something is wrong when we can put a man
on the moon but 40 years later can’t tax a hamburger. With inequality rising
working people will no longer accept cuts to services when politicians allow
scandalous levels of tax avoidance by the wealthiest on the planet” she said.
“Companies such as McDonald’s are mocking
their workforce when they argue low wages are needed to be competitive but
cream off billions in profits in tax havens” said Ron Oswald, IUF General
Secretary.
“Everyone benefits when companies pay tax
where they make the profits,” he said.
The report Golden
Dodges follows the recent European report Unhappy Meal that outlines McDonald’s tax avoidance strategies in
Europe.
Interest in the extensive tax avoidance
practices of multinational companies is growing as corporate tax scandals
unfold. Recently, an Independent
Commission on Reform of International Corporate Taxation was established with prominent figures such as Joseph
Stiglitz and Jose Ocampo to recommend changes to the global tax system.
For more information:
Public
Services International is a global trade union federation representing 20 million working
women and men who deliver vital public services in 150 countries. PSI champions
human rights, advocates for social justice and promotes universal access to
quality public services. PSI works with the United Nations system and in
partnership with labour, civil society and other organisations.
