Fast food giant McDonald's to move non-US tax base to UK

McDonald's is moving its non-US tax base to Britain from Luxembourg amid a battle with EU regulators.

The fast food giant is creating a new holding company through which it will route non-US royalties.

The announcement was welcomed by the Prime Minister's official spokeswoman.

McDonald's, led by Briton Steve Easterbrook, has come under fire from EU officials investigating claims that it has avoided more than €1bn (£800m) in tax through the use of a loophole in Luxembourg.

McDonald's has said that it complies with all tax rules.

It said the changes would result in the creation of a UK structure responsible for most of the royalties received from licensing to franchises outside the United States.

Profits of the new international holding company will be taxed in the UK.

Under current arrangements, McDonald's said, it paid $2.5bn (£2bn) in corporate taxes in the EU from 2011 to 2015.

Chancellor Philip Hammond last month confirmed the rate of UK corporation tax was being cut from 20% to 17%.

The company said in a statement: "McDonald's selected the UK for the location of its new international holding structure because of significant number of staff based in London working on our international business, language, and connections to other markets.

"This change has a clear business rationale in matching our corporate structure to our new functional structure.

"The profits of the new international holding company will be subject to UK corporation tax.

"McDonald's pays a significant amount of corporate taxes.

"For perspective, from 2011-2015, we paid more than $2.5 billion in corporate taxes in the EU, with an average tax rate approaching 27%."

A spokeswoman for Prime Minister Theresa May said: "We welcome continued investment from companies around the world into the UK, particularly where that's securing growth and increasing jobs."