Luxembourg joins Ireland in EU corporate tax spotlight with McDonald's deal

McDonald’s exploited a pact with Luxembourg to avoid tax on hundreds of millions of euros in profits for more than half a decade, EU regulators alleged as they added the Big Mac maker to a growing list of US firms facing a fiscal clampdown.

Months after trade unions accused the company of avoiding more than €1bn in taxes across Europe, the EU said it suspects Luxembourg broke state-aid rules from 2009 by allowing a McDonald’s unit to escape taxes in the nation and across the Atlantic by misusing a double-taxation accord.

McDonald’s rejected the EU’s accusations, saying it “pays a significant amount of corporate income tax” in Europe.