McDonald's Australia has been accused of dodging up to $500 million in tax by a report published by the Public Services International (PSI), the International Union of Foodworkers and the Service Employees International Union (SEIU).
The report, released yesterday, explained that Australia was one of the markets that the fast-food giant funnels funds out of, in order to pay less tax.
It isn't just the business locally that has come under fire, McDonald's has been accused by the report of dodging $1.8 billion dollars of tax globally.
In the Australian market specifically, the report states, McDonald's Australian operations show an unusually high level of intercompany payments between 2009-2013. According to the report these payments are mostly to a subsidiary in Singapore, and would reduce Mcdonald's tax bill significantly.
The report says that the business sends service fees offshore, and that they are higher than what it could possibly collect off the back of its 943 stores in this region, which the report claims could point to Mcdonald's avoiding tax. In 2013 alone, the report claims, this strategy would have reduced the corporations tax bill by more than half.
McDonald's has defended the tax it pays in Australia, with the fast-food giant saying in a statement: “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.”
McDonald's isn't the first multinational to come under fire for tax avoidance, with a recent tax avoidance enquiry forcing Apple, Google, Microsoft and News Corp, to front up and answer questions about their tax structures.
Tax avoidance has been rife, particularly in the tech space, for years. Michael West, business columnist at The Sydney Morning Herald, previously addressed this for AdNews, saying: “While media pressure will increase in 2015 on government and its agencies for greater disclosure and transparency, powerful vested interests will be lobbying hard behind the scenes to reduce disclosure and compliance from its already pitiful levels.
“Although public recognition of the scourge of multinational tax avoidance, particularly in the media and technology sectors, is at all-time highs, so, unfortunately, is the campaign to hide things from the public and the tax office.”
As a conclusion the report states that governments, more broadly, should increase their investment in human capital in tax agencies to give regulators the resources necessary to pursue corporate tax avoidance and recover unpaid tax.
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