The European Commission has published the non-confidential version of the final no-aid decision adopted on 19 September 2018 concluding that Luxembourg did not give selective tax treatment to McDonald's that constituted illegal State aid.
The decision concerns tax rulings granted by Luxembourg to McDonald's in 2009, which confirmed that no tax was due in Luxembourg on franchising royalty income on the grounds that the profits were subject to taxation in the U.S. based on provisions of the Luxembourg-U.S. tax treaty and Luxembourg's interpretation of what constitutes a taxable presence. This resulted in double non-taxation because the income was not actually subject to tax in the U.S. either, which prompted the State aid investigation. In its decision, however, the Commission found that the non-taxation in Luxembourg did not lead to illegal State aid, as it is in line with national tax laws and the Luxembourg-U.S. tax treaty.
The decision is available under the case number SA.38945 on the competition website.