Arcos Dorados exterior
Federal prosecutors in Brazil will be looking into Arcos Dorados.  

SÃO PAULO, Brazil – A federal prosecutor with the Public Prosecution Service in Brazil recently opened a criminal probe into McDonald’s and Arcos Dorados, the largest McDonald’s franchisee in Latin America, according to published news reports.

The investigation is to determine if Oak Brook, Illinois-based McDonald’s and Arcos Dorados violated Brazil’s tax laws and failed to comply with the country’s franchise and competition laws. The investigation also will look into whether Arcos bribed public officials, resulting in legislation that helped reduce the tax burden on Arcos.

In December, the European Union launched an investigation into alleged preferential tax treatment of McDonald’s Europe by the Luxembourg government. The EU’s Antitrust Commission said that McDonald’s Europe Franchising has paid no corporate tax in Luxembourg or the United States since 2009. McDonald’s has denied any wrongdoing.