McDonald’s in Russia has persuaded the Russian government that their outlets are classified as food retailers or supermarkets rather than restaurants. The fast food chain has been charged to pay a tax rate of 18% instead of 10% in Moscow. This has prompted the fast food company to file a law suit against Moscow city authorities. Fortunately, lawyers for the food company were able to win the case; McDonald’s will continue to pay the tax rate of 10%.
More good news for the company: McDonald’s can continue paying just one ruble per square meter of space as part of the special 20-year rent contract they signed for the first two McDonald’s outlets in Russia, which were both located in Moscow, in 1990.
Since then, the U.S. fast food chain has expanded from two outlets to over 276 stores across Russia. Their first day of opening has already served 30,000 customers and is still growing each day. McDonald’s has created Russian versions of their menu like the “beef a la russe” and will continue to improve their products to meet the demands of the one million Russians who patronize their restaurants.
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