Burger King Canada - The fast food chain is about to save $1.2 billion in taxes for the coming three years thanks to its latest move. Burger King is set to move its headquarters from the United States to Canada. In addition to the move, Burger King Worldwide, Inc. is slated to become the new owner of Tim Hortons Inc.
The big leap from US to Burger King Canada is reportedly for the food chain's manoeuvre of purchasing Tim Hortons for $11 billion. Yet, for tax corporate watch dogs in the industry, they claim it is simply Burger King's way of paying less taxes. Obviously, Canada has a lower tax rate compared to that of the United States.
The move by Burger King Canada being a tax manoeuvre however was denied by the company in a statement. According to the food chain, such transaction of buying out Tim Horton and moving to Canada was simply "driven by growth, not tax rates."
"Going forward, we do not expect our tax rate to change materially," adds the statement made by Burger King Canada.
With the purchase of Tim Hortons and the move by Burger King Canada, the new company named Restaurant Brands International (RBI) housing both food chains is set to operate 18,000 locations. There are plans to open more chains "at a significantly greater pace."
"As part of Restaurant Brands International, Tim Hortons will remain an independent, iconic Canadian brand, but with significant opportunities to accelerate our brand development around the world," says Tim Hortons chief executive, Marc Caira in a report by Global News.
The move by Burger King Canada of course remains to be seen as a tax avoidance opportunity. The food chain however has relentlessly slammed the "flawed" reports. This move by Burger King is not at all surprising as US companies have long been involved in inversions, which basically involve buying out a foreign company to assume the nationality of its tax thus cutting off overall costs of taxes.
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