McDonald's could face $500m tax recall from Brussels

The European Union is preparing to crack down on another US corporation's taxes as fast food chain McDonald's could be forced to backpay $500m to Luxembourg.

In August, tech giant Apple was judged to have underpaid tax to the Irish state to the tune of €13bn on its European profits, and ordered to repay the amount. Both the company and Ireland have dismissed the ruling and said they will appeal.

According to the Financial Times, McDonald's paid a tax rate of 1.49% on its profits through its European headquarters in Luxembourg since 2009. The standard tax rate is 29.2%.

EU commissioner Margrethe Vestager appears to be cracking down on corporations' tax practices in Europe, and has shown no willingness to bow to pressure from the Business Roundtable, which last week called for the reconsideration of the Apple ruling.

McDonald's and Luxembourg have both said that they have done nothing illegal.

"We pay the taxes that are owed and have not received any preferential treatment," a statement from the fast food chain read.

"From 2011-2015 McDonald’s Companies paid more than $2.5bn just in corporate income taxes in the European Union, with an average tax rate approaching 27 per cent."

The investigation into McDonald's taxes began last December after a raft of secret tax deals were uncovered in Luxembourg.

Apple CEO Tim Cook dismissed the ruling on his company as "political crap", and various company executives have accused the commission of acting as a supranational tax authority.