McDonald's tax deals under investigation by EU regulators

The investigation follows similar probes into Starbucks and Fiat Chrysler

McDonald's has not paid corporation tax in Luxembourg or the US on royalties paid by franchises in Europe and Russia since 2009 (Corbis)

McDonald's tax deals with Luxembourg are under investigation by EU antitrust regulators.

Regulators are looking into tax deals that may have allowed McDonald's to escape paying taxes on European royalties in Luxembourg and the US. The investigation follows similar probes into Starbucks and Fiat Chrysler two months ago in which the two companies were ordered to repay £21.2 million because their tax deals were seen as unlawful aid.

McDonald's has not paid corporation tax in Luxembourg or the US on royalties paid by franchises in Europe and Russia since 2009 due to tax rulings in Luxembourg, regulators said.

"A tax ruling that agrees to McDonald's paying no tax on their European royalties either in Luxembourg or in the U.S. has to be looked at very carefully under EU state aid rules," European Competition Commissioner Margrethe Vestager said.

"The purpose of double taxation treaties between countries is to avoid double taxation – not to justify double non-taxation."

Additional reporting by Reuters