The Big Mac of tax avoidance

The most expensive thing in a McDonald’s Big Mac is not the patty or the labour cost, but the intellectual property that McDonald’s uses to minimise its tax in Australia. Callum Foote reports on one of the methods the multinationals use to shift profit to tax havens and the government’s response.

The shifting of profits through fees paid on intangible assets such as intellectual property royalties and service fees takes billion of dollars out of the Australian taxation system yearly, and some of the biggest household names are in on the scam: Amazon, Oracle, E-Bay, Accenture, Microsoft.

According to Jason Ward, tax analyst at the Centre for International Corporate Tax Accountability and Research (CICTAR) “These service fees are a form of royalty payments and are charges for the use of intellectual property rights that the global burger giant shifted from Singapore to London.”