Enter the tax guru

And we learned that McDonalds negotiated a tax free deal with Luxembourg that meant that royalties paid to that jurisdiction were not taxed anywhere.

Pretty sure those were taxed when they were repatriated to the US….

10 thoughts on “Enter the tax guru”

  1. On another thread Ritchie said
    ‘Being paid to do nothing is an idea that appeals to many, and sounds too good to be true’
    Isn’t that a description of him?

  2. Scientists claim that quark-gluon plasma is the densest matter in the universe outside of a black hole. Clearly none have ventured a peek at the matter between Ritchie’s ears.

    Tim’s correction is useful in demonstrating just how little Ritchie actually knows about U.S. corporate taxation. It’s not like the taxation of repatriated profits of U.S. corporations hasn’t been a bit of an issue over the past few years.

    Moron.

  3. John 77

    That’s absolutely brilliant. Is there a model train enthusiast somewhere who would give Murphy a modest grant – the only condition being that he confines himself to playing with his trainset, and doing nothing else?

  4. I doubt very much that the royalties in Luxembourg weren’t taxed in Luxembourg. More likely that the Lux authorities gave an advance ruling that the onward payment of royalties to somewhere sunny would be an allowable expense leaving little or no net profit in Luxembourg, but then I am not a self-proclaimed tax expert like the Murphaloon.

  5. ‘Being paid to do nothing is an idea that appeals to many, and sounds too good to be true’

    We already have millions of them – they’re called pensioners.

  6. What Alex said.

    Rarely, if ever, did the erstwhile tax rulings supremo, Mr Kohl, grant rulings that resulted in no tax being paid to the Grand Duchy.

  7. “I doubt very much that the royalties in Luxembourg weren’t taxed in Luxembourg.”

    They weren’t, apparently. According the EU investigation, McDonalds filed in Luxembourg on the basis that all the profits were allocated to the US branch and hence not taxed in Luxembourg. Meanwhile, in the US, they filed on the basis that the US branch didn’t have enough substance to become taxable in the US.

    Basically, it appears the whole structure was a scheme to take advantage of the differing thresholds for the taxation of a foreign branch in US and Luxembourg tax law.

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