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The latest state aid investigation

On 3 December 2015 the EU Commission announced that it has opened a further formal investigation into tax rulings issued by Luxembourg. This time the target of the investigation is Luxembourg’s tax treatment of McDonald’s resulting in the double non-taxation of franchise payments for McDonald’s European and Russian restaurants. 
 
The investigation will focus on two rulings given to McDonald’s by the Luxembourg tax authorities in 2009 as a result of which it appears that McDonald’s may have paid no tax on royalty payments received from franchisees operating McDonald’s. The Commission will investigate whether these rulings and the consequent double non-taxation amounted to a selective advantage granted contrary to state aid rules. 
 
It appears that the McDonald’s European corporate structure involved a Luxembourg head office with branches in Switzerland and the US. The Luxembourg company owned...

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