McDonald’s: In Russia, It’s A Supermarket

Taxes and Big Macs weren’t adding up for McDonald’s Corp., leading the chain to persuade Russian authorities that its outlets are supermarkets rather than restaurants. The Oak Brook, Ill. company’s lawsuit blocked an attempt by Russian tax authorities to almost double its tax bill.

The chain, which opened its first outlet in the then-Soviet Union in 1990 (and now has 276 units in Russia), successfully argued that it should be classified as a food retailer for tax purposes rather than as a restaurant since many of its products are prepackaged and sold supermarket-style to customers. As reported in The Telegraph, the decision allows McDonald’s in Russia to continue paying 10% tax on its profits rather than the 18% tax levied on restaurants. Expect more chains to follow the burger giant’s lead.