Fiscal State Aid and Tax Treaty Law: the puzzling decision in the McDonald’s Case* On 17 December 2018 the European Commission issued the public version of its decision in the McDonald’s case (SA.38945). The Commission found, contrary to its initial conclusion in the opening decision, that Luxembourg did not grant illegal State aid to McDonald’s as a consequence of the exemption of income attributed to a US branch. If the outcome seems reassuring when being compared to the opening decision of 2015, it is nevertheless puzzling in several respects and leaves various questions unanswered as to the application of State aid law to tax treaty provisions, and more generally to certain international tax rules. The facts were relatively simple. The McDonald’s group is primarily a franchisor,
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The EU Commission holds that Luxembourg did not grant illegal State aid to a fast-food company as a consequence of the exemption of income attributed to a US branch (McDonald’s)
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