By Daniel Hunter

The European Union (EU) is to investigate claims that McDonald's has avoided paying €1bn ($1.1bn) in tax by using a loophole in Luxembourg.

EU competition commissioner Margrethe Vestager said she will investigate claims made by trade unions that McDonald's has paid just €16m worth of tax on royalties worth €3.7bn between 2009 and 2013.

McDonald's has been accused of using a similar structure used by numerous companies exposed by The Guardian's 'LuxLeaks'.

According to the accusations made by trade unions, the subsidiary used by McDonald's in Luxembourg employs 13 people, but reported revenues of €834m in 2013 - €64m per worker.

McDonald's has declined to comment.