France raids offices of Google and McDonald's
The tax raids of Google and McDonald's are a political cinch in France. Attention on aggressive tax avoidance has never been higher and France is redirecting that at two companies that tip-toe on the line of tax evasion.
Finance Minister Michel Sapin said France will "go all the way" to ensure multinationals on its soil pay taxes.
McDonald's was raided Tuesday and what they did is common among multinationals. Tax officials accused them of using a Luxembourg-based entity, McD Europe Franchising, to shift profits to lower-tax jurisdictions by billing the French division excessively for use of the company brand and other services.
Effective 'lobbying' will hold off some countries from pursuing similar prosecutions but, ultimately, money talks and governments need money. If you were to poll people in France, surely 95% would approve of cracking down on multinational tax avoidance and that's why stories like this will continue to break.
For stock markets, this will be a fresh squeeze on profitability and a new headwind.
