Unhappy meal : zero-hours contracts and tax avoidance

for reader offer. McDonald's logo.

 

In 2009 McDonald’s restructured its business in Europe with the effect of extracting billions in royalties from its European operations.

This restructuring involved a number of decisions .

A Luxembourg based intellectual property holding company (McD Europe Franchising Sàrl) was set up immediately after a tax policy change (in Luxembourg) which allowed companies to benefit from significant reductions of their tax rate on income earned from intellectual property. Subsequently billions in royalties from McDonald’s European operations were routed to Luxembourg in the coffers of McD Europe Franchising Sàrl.

Over the five years 2009-2013 it is estimated that McDonald’s avoided the payment of €1 billion in taxes. Consequently the European states hosting 7,850 outlets which in 2013 had an estimated turnver of €20.3 billion have lost €1 billion in tax revenue.

McDonald’s the tax avoider tries to depict itself as a vital provider of jobs, particularly for youth. Most of McDonald’s employees experience precarious, low-wage work with little prospect for steady employment or advancement. It is known for instance that in the UK, the vast majority of McDonald’s 97,000 employees are on zero-hours contracts : employment contracts with neither guaranteed hours nor work schedule stability.

A very unhappy meal. Precarious employment for the employees and tax avoidance galore for the corporation!

 

Information extracted from : Unhappy Meal: €1 billion in tax avoidance on the Menu at McDonald’s  (report published by  Coalition of European and American Trade unions and War on Want, the UK based anti-poverty campaign group, 24th Feburary 2015)

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