International fast-food giant McDonald's avoided paying half a billion dollars of tax in Australia over a five-year period by shifting profits through the low-tax nation of Singapore, a new report by a global coalition of trade unions says.
The report, Golden Dodges: How McDonald's Avoids Paying Its Fair Share of Tax, does not allege illegal behaviour by the company, which is among several multinationals that have been taking advantage of loopholes in current laws.
It analysed McDonald's financial accounts and said the company was "well-positioned to take advantage of the international loopholes and mismatched tax regimes that allow companies to pay very low tax rates on royalty income".
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"McDonald's uses royalty payments from franchisees and foreign subsidiaries in major markets to route profits to tax havens," the report states. "These strategies may have allowed it to avoid up to $US1.8 billion in tax in those markets in the years between 2009 and 2013, including €1 billion across Europe and $A497 million in Australia."
A spokeswoman for McDonald's said: "We have always been committed to paying our fair share of tax in Australia. In fact, over the past five years, McDonald's Australia has paid in excess of $500 million in tax."
The report said globally, more than 80 percent of McDonald's stores are operated by franchisees and the company's profit margin on franchise revenues was 81.7 per cent - more than five times as high as its 15.9 per cent margin for corporate store operations.
"From the perspective of franchisees, tax strategies which siphon profits from McDonald's operating markets to tax havens may limit the ability of the company to reinvest in its stores and support franchisee success," the report said.
"McDonald's workers, who are paid such low wages that they must rely on public benefits to make ends meet, might reasonably ask whether the money that the company holds in tax havens might be better used to invest in its employees."
I'd like to see the average worker who gets taxed at 48% try to get away with a tax dodge like that.
