McDonald’s will pay a fine of €508m after approving the payment of €737m to tax authorities in May to settle its corporate tax evaded through a tax evasion scheme linked with Luxembourg. Photo: Shutterstock

McDonald’s will pay a fine of €508m after approving the payment of €737m to tax authorities in May to settle its corporate tax evaded through a tax evasion scheme linked with Luxembourg. Photo: Shutterstock

Fast food chain McDonald’s agreed to pay a €1.25bn fine to avoid a trial in a tax evasion case in France, which had it linked with a Luxembourg company.

The trial is not expected to take place as AFP reports that McDonald’s has signed a judicial public interest agreement (CJIP) with the French national financial prosecutor’s office (PNF) which still needs to be validated.

McDonald’s will pay a public interest fine of €508m after approving in May the payment of €737m to the tax authorities to settle its corporate tax evaded through this tax evasion scheme.

McDonald’s tax settlement--made up of a €508m fine and €737m in back taxes--is the largest such agreement ever signed in France. It follows the exposure of tax avoidance mechanisms in France between 2009 and 2020 via the Luxembourg company McD Europe Franchising sàrl, opened in January 2009, and represents 2.5 times the value of the money saved by the fast-food chain.

“On condition of payment of the fine, the validation of the agreement means the end of the prosecution,” said chief financial prosecutor Jean-Francois Bohnert.

The Luxembourg company, which employed 15 people, was written off in 2016. It had ended 2015 with a profit of €500m and €1.8bn in its bank accounts.

Originally published in French by and translated for Delano