McDonald's agrees to pay $1.3 billion to settle French tax dispute

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The case centered on allegations, which first surfaced in 2014, that the U.S. burger chain diverted profits made in France to Luxembourg to pay lower taxes.

French media reported then that the authorities were scrutinising royalties sent to a Luxembourg subsidiary. McDonald’s (NYSE:MCD) – whose French headquarters were investigated by police as part of the probe – at the time denied any wrongdoing.

The settlement allows the company to avoid a trial.

McDonald’s lawyers said the settlement did not amount to a guilty plea. “It’s a judicial agreement…. to avoid a trial, which is a very long and inevitably uncertain process,” lawyer Denis Chemla told reporters.

The settlement is similar to a $1 billion accord reached by Google (NASDAQ:GOOGL) in 2019 to end a French case where it had also been accused of unfairly shifting profits.

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