Unlawful deals - EU corporate tax regulation

First there was the Double-Irish, then the Double-Dutch to describe corporate tax avoidance schemes and, now — to confuse us even further — the McTax scheme has emerged to denote sweetheart tax arrangements enjoyed by McDonalds in Luxembourg — or should that be Luxembourger?

European Commission competition regulators are to investigate McDonald’s tax deals with Luxembourg, which let the American fast-food chain escape paying taxes on European franchise royalties since 2009. The action comes two months after the commission ordered Luxembourg to recover up to €30m from Fiat Chrysler and ordered the Dutch to do the same for Starbucks because their tax deals were seen as state aid. A ruling on Apple’s tax arrangements in the Republic is expected next year.

If the McDonalds deal is deemed unlawful, it will embarrass European Commission president Jean-Claude Juncker who was Luxembourg’s prime minister and finance minister for almost 20 years. As for McDonald’s, it may have to super-size its tax payments.