McDonalds Ordered to Pay France $1.25 Billion in Tax Dispute

McDonald’s will pay the equivalent of over $1 billion in fines and back taxes to French authorities, bringing an end to a yearslong dispute over alleged tax evasion.

The fast-food giant will pay 508 million euros, or the equivalent of $532 million in the United States, in fines and 737 million euros (or $772 million) in back taxes as part of a settlement approved by a Paris court on Thursday, making the $1.25 billion settlement the second largest in French history, according to France 24.

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The case, which first surfaced in 2014, centered on allegations that McDonald’s French operation diverted fees paid by its franchise restaurants to its European parent company in Luxembourg, reducing its taxable income in France as a result. An investigation was opened in 2016 after McDonald’s union officials filed a complaint reporting that the company was committing tax evasion.

McDonald’s argued the settlement was not an admission of guilt. The company instead insisted it had paid more than 2.2. billion euros (or over $2.3 billion) in corporate income tax in France for the period in question and created nearly 25,000 new jobs in the country, according to a statement obtained by the outlet.

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McDonald’s France is “working proactively with French tax authorities to agree the current and future level of brand and know-how fees,” the company said.