Demonstrators dressed as Ronald McDonald protest for better wages for McDonald's employees in Sao Paulo, Brazil. Credit:Andre Penner At the same time as McDonald's local tax bill reduced, the company's profit after income tax increased to $572.1 million from $130.5 million in 2014. The result appears to be impacted by an "adjustment received from [a] related entity" of $361.3 million. "It is an inter-company payment," McDonald's Australia spokeswoman Laura Keith told Fairfax Media. "However, while it is accounted for in 2015, the tax impact occurred in prior years." McDonald's 2015 tax bill would have been more had it not reduced its tax by $109.8 million in tax in 2015, known in its financial accounts as an "adjustment for prior tax years". In 2014 McDonald's back paid $78 million in tax.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison during the election campaign. Credit:Andrew Meares A confidential company source has told Fairfax Media the $78 million was a settlement - a deal cut with the Australian Taxation Office - that reduced its earlier tax bill from about $300 million. But Ms Keith said that was incorrect. "McDonald's pays its fair share of tax in Australia and conducts its business within all standards and regulations," she said. Nick Xenophon may well help decide who forms the next government. Credit:Paul Jeffers "There are numerous reasons for fluctuations in our accounts in any given year, however if you look at the past five years McDonald's Australia has paid more than $560 million in income tax at an average effective company tax rate of 29.98 per cent."

Independent South Australian senator Nick Xenophon said: "It's as though Australia has ordered a burger and fries from McDonald's and all we're getting is the pickles." Labor's shadow assistant treasurer Andrew Leigh. Credit:Louise Kennerley An 'inflated' fee It's as though Australia has ordered a burger and fries from McDonald's and all we're getting is the pickles. Independent senator Nick Xenophon Tax advocacy groups say the "service fee" that McDonald's pays its related parties is not a genuine fee because it is inflated.

"It's outrageous," Tax Justice Network spokesman Mark Zirnsak said. "It would appear to be a highly inflated charge to itself just for using the brand. It's frustrating that the ATO doesn't have ability to tackle this kind of behaviour." McDonald's burgers in Australia don't get taxed all that much. He said recent legislation introduced in Australia to stop multinationals using such legal loopholes in tax law was not working. To stop companies exploiting loopholes, "the only way to deal with it would be to treat McDonald's as single entity", Dr Zirnsak said. "It would appear to be a highly inflated charge to itself just for using the brand," says Tax Justice Network spokesman Mark Zirnsak.

Treasurer Scott Morrison told Fairfax Media: "Multinational corporations that deliberately book profit offshore and avoid paying Australian tax are exactly the taxpayers the Coalition Government is going after, and exactly the sort of conduct that we are stamping out. "Two pieces of legislation in particular that the government enacted will target this conduct of booking profits offshore - the Multinational Anti Avoidance Law (MAAL) and the Diverted Profits Tax (DPT). ...The DPT will be introduced in the second half of 2016 and will apply from 1 July 2017. "We have also doubled basic penalties for basic tax avoidance and increased penalties one hundred fold for non-disclosure of tax affairs, including revealing what profit is earned overseas and what tax is paid." Labor shadow assistant treasurer Andrew Leigh said the Turnbull government's tougher anti-avoidance measures and more recent May budget announcement of the Diverted Profits Tax would, in the end, only raise $200 million. "Whether it's Panama Papers or allegations levelled at specific large multinational companies, Australians are questioning why the government has been a laggard on multinational tax avoidance."

The Greens and Senator Xenophon have called for a public register of settlements that allows the public to know the variance between tax bills companies originally get, and how much they end up paying after cutting deals with the ATO. The ATO's own data shows that in 2013-14 the ATO accepted about half the $5.6 billion it originally demanded from 81 large companies. Getting 'pickles' Senator Xenophon said: "If multinationals don't pay their fair share of tax we need to seriously consider a turnover tax as a backstop to prevent revenue leaking overseas. The litmus test for tax policy should be that whether McDonald's is competing fairly in terms of its tax paid compared to family-owned Australian businesses." Greens leader Richard Di Natale said multinationals were still avoiding paying their fair share: "There is clearly so much more that needs to be done to ensure Australia isn't being cheated out of the tax dollars that help pay for our schools, hospitals, and other services the community wants and deserves."

The tax bill revelations come after a Fairfax Media investigation found McDonald's is underpaying its Australian workers tens of millions of dollars a year under a cosy deal struck with Labor's largest union affiliate that excludes weekend penalty rates. The European Union has previously investigated trade union claims that the company exploits a royalties loophole through Luxembourg. A 2013 report by a global coalition of trade unions called Golden Dodges: How McDonald's Avoids Paying Its Fair Share of Tax, found that the company avoided paying half a billion dollars of tax in Australia over a five-year period.