Day 006 - 05 Jul 94 - Page 45
1 Q. You said it would be absolute rubbish to suggest they are
carried out for good PR and for tax advantages; is that
2 right?
A. The ethos of McDonald's today (and it has been since
3 1955) is to put something back into the communities where
we do business, being a good corporate citizen supporting
4 the people who live and work in those areas.
5 Q. Why does McDonald's give back to the community, as you put
it?
6 A. It is good business.
7 Q. So you would agree then it is basically to drum up your
profits?
8 A. It is good business to put something back into the
communities where you have had support from the people who
9 have used your establishment. I would think that is
accepted as a rather universal truth.
10
Q. You would agree with the statement that what you give to
11 the community today will come back in the form of added
sales tomorrow?
12 A. I would hope so.
13 Q. What about tax relief? Does McDonald's gets tax relief on
its charitable activities?
14 A. I imagine it does.
15 Q. You do not know?
A. Well, we get tax relief for many things, capital
16 investments. There is tax relief available for certain
forms of giving, I am sure. Do we get it? I do not audit
17 every line of the financial statement. If it is put in
and declared, I guess we do. The time that every employee
18 spends donating orange bowls to local communities to raise
funds is not something we put on the tax return for
19 treatment; some things do, some things do not.
20 MR. JUSTICE BELL: Do you know whether it saves the company tax
or just the charity is able to reclaim the tax which the
21 company has paid? Do you know which way it works?
A. It would be probably a combination of both where we
22 will do many, many things of a giving nature to a
community which never find themselves down as a charitable
23 giving exercise. They are merely an expense of doing
business. There will be instances where we donate a piece
24 of equipment to a hospital via ronald mcdonald children's
charities. I gather that would be treated for tax
25 purposes in the normal way. But we do -- if Ronald
McDonald is appearing at a school for a bike safety
26 programme is considered to be putting back into the
community and, therefore, somewhat charitable, that would
27 not find its way for tax purposes on to our return. That
is just a cost of doing business.
28
MISS STEEL: It is right, is it not, that you get a lot of
29 positive publicity as a result of all this?
A. Yes, I think that is fair to say.
30
Q. You do not have to pay for that publicity?
