EU hits McDonald's with tax investigation

The European Union plans to investigate McDonald's tax deals with Luxembourg that enabled the U.S. fast-food chain to escape paying taxes on European franchise royalties from 2009.

The move comes two months after the European Commission ordered Luxembourg to recover up to $32 million from Fiat Chrysler Automobiles and the Dutch to do the same for Starbucks because their tax deals were seen as unlawful aid.

"A tax ruling that agrees to McDonald's paying no tax on their European royalties either in Luxembourg or in the U.S. has to be looked at very carefully under EU state aid rules," European Competition Commissioner Margrethe Vestager said. "The purpose of double taxation treaties between countries is to avoid double taxation - not to justify double nontaxation."

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