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| French Tax Officials Turn Hungry Eye to McDonald’s | French Tax Officials Turn Hungry Eye to McDonald’s |
| (about 11 hours later) | |
| PARIS — McDonald’s French headquarters have been raided by financial investigators, the latest salvo in a campaign by President François Hollande’s government to make multinational corporations pay more in taxes. | |
| A police official, who could not be named under departmental policy, said Thursday that documents were removed during the raid on May 18. McDonald’s confirmed the search and said in a statement that it was “cooperating fully with the authorities on this matter.” The company did not respond to requests for additional comment. | A police official, who could not be named under departmental policy, said Thursday that documents were removed during the raid on May 18. McDonald’s confirmed the search and said in a statement that it was “cooperating fully with the authorities on this matter.” The company did not respond to requests for additional comment. |
| As was the case in a raid on Google’s French headquarters on Tuesday, the police are investigating claims that McDonald’s deliberately manipulated its corporate accounts to understate its French revenue and profits and in that way reduce its tax liability. | As was the case in a raid on Google’s French headquarters on Tuesday, the police are investigating claims that McDonald’s deliberately manipulated its corporate accounts to understate its French revenue and profits and in that way reduce its tax liability. |
| Claims of tax avoidance by multinational corporations have pitted European countries against one another, and prompted European Union officials to investigate whether some of the bloc’s members are dangling unfair tax inducements to attract companies. One of those European Union inquiries, begun in December, is examining whether Luxembourg granted McDonald’s overly generous tax breaks. | Claims of tax avoidance by multinational corporations have pitted European countries against one another, and prompted European Union officials to investigate whether some of the bloc’s members are dangling unfair tax inducements to attract companies. One of those European Union inquiries, begun in December, is examining whether Luxembourg granted McDonald’s overly generous tax breaks. |
| McDonald’s Golden Arches are every bit as familiar to the French as to Americans. McDonald’s is one of the largest businesses in France, with more than 73,000 employees and well over 4 billion euros, or about $4.5 billion, in annual sales. France ranks second to the United States in profitability for the fast-food chain, Jean-Pierre Petit, the former chief executive of McDonald’s France, told the newspaper Le Figaro in 2014. | McDonald’s Golden Arches are every bit as familiar to the French as to Americans. McDonald’s is one of the largest businesses in France, with more than 73,000 employees and well over 4 billion euros, or about $4.5 billion, in annual sales. France ranks second to the United States in profitability for the fast-food chain, Jean-Pierre Petit, the former chief executive of McDonald’s France, told the newspaper Le Figaro in 2014. |
| But France is among the European Union countries that view companies’ aggressive tax-minimization strategies as an affront to national sovereignty. | But France is among the European Union countries that view companies’ aggressive tax-minimization strategies as an affront to national sovereignty. |
| McDonald’s has been under a harsh spotlight in France since December, when Eva Joly, a leading Green Party official, brought a lawsuit on behalf of the company’s workers’ council. It accuses the company of understating its earnings to avoid a legal obligation to share profits with employees. | McDonald’s has been under a harsh spotlight in France since December, when Eva Joly, a leading Green Party official, brought a lawsuit on behalf of the company’s workers’ council. It accuses the company of understating its earnings to avoid a legal obligation to share profits with employees. |
| And a February 2015 report by a coalition of European and American trade unions claimed that McDonald’s had avoided about €1 billion in taxes since 2009 by restructuring its business to route earnings through its Luxembourg subsidiary. | And a February 2015 report by a coalition of European and American trade unions claimed that McDonald’s had avoided about €1 billion in taxes since 2009 by restructuring its business to route earnings through its Luxembourg subsidiary. |
| Neither the French government nor McDonald’s has said how much money is at stake in the dispute. But L’Expansion, a business magazine, reported in April that the French authorities were demanding that the company pay €300 million in unpaid taxes and penalties. | Neither the French government nor McDonald’s has said how much money is at stake in the dispute. But L’Expansion, a business magazine, reported in April that the French authorities were demanding that the company pay €300 million in unpaid taxes and penalties. |