McDonald's French headquarters raided in tax fraud probe

It follows suspicions the restaurant chain is funnelling its earnings to Luxembourg

McDonalds, France, Paris, tax probe, police, raid, taxes, Luxembourg

File photo of McDonalds french fries | Image: Steve Parsons / PA Wire/Press Association Images

The French headquarters of McDonald's were raided last week as part of a tax fraud probe, police say.

Financial and tax crime officials searched the company's premises near Paris on May 18th seizing documents, a police source said.

The investigation follows suspicions the restaurant chain has been unlawfully lowering its tax bills by funnelling its earnings in France to Luxembourg, where its European headquarters are based.

A spokesman for McDonald's confirmed the company was "cooperating fully with authorities on this matter".

The decision to investigate the company was confirmed last year by European Competition Commissioner Margrethe Vestager, who has already found against Fiat Chrysler and Starbucks' tax arrangements in the Netherlands and Luxembourg.

In both cases the companies were ordered to pay up to €30m in backdated taxes.

In December, a spokesperson for McDonald's said: "From 2010-2014, the McDonald's companies paid more than US$2.1bn (€2bn) just in corporate taxes in the European Union, with an average tax rate of almost 27%".

"Additionally, we pay social, real estate and other taxes".

"Our independent franchisees, who own and operate approximately 75% of our restaurants in Europe, also pay corporate tax and many other taxes".

In January, McDonald's announced a 5% fall in full-year profit to US$4.5bn (€4.02bn) while revenues were 7% lower at US$25.4bn (€22.7bn).

The news comes just two days after investigators raided the Paris headquarters of Google as part of a probe over tax payments.