by Sahid Fawaz
Burger King may soon find a new home outside of the United States – and with that a potentially lucrative tax situation.
According to the New York Times:
“The restaurant operator said on Sunday that it was in talks to buy Tim Hortons, the Canadian doughnut-and-coffee chain, in a potential deal that would create one of the world’s biggest fast-food businesses.
If completed, the deal would mean Burger King’s corporate headquarters would move to Canada, raising the specter of yet another American company switching its national citizenship to lower its tax bill.
Under the expected terms of the deal, Burger King would create a new corporate parent that would house both chains, which would be operated independently. Together, the two companies would have a market value of more than $18 billion.”
Such a move would likely result in a much lower tax bill for Burger King. This tactic, known as tax inversion, is becoming a new trend for American companies who are looking for yet another way to get out of tax obligations to Uncle Sam. It’s an unfortunate development as it in effect allows companies to operate in the US without paying their share.
We as Americans need to pressure our elected officials to pass appropriate legislation that tells companies like Burger King that, no, you cannot have it your way.