This new Americans for Tax Fairness report shows that Burger King and its leading shareholders will dodge an estimated $400 million to $1.2 billion in taxes between 2015 and 2018 from its planned merger with Tim Hortons, a Canadian company. This contradicts the assertion by CEO Daniel Schwartz that Burger King’s plan to become a Canadian company (known as an inversion) “is really not about taxes.”
The ATF report finds that by renouncing its U.S. corporate “citizenship” Burger King could dodge $117 million in U.S. taxes on profits that it held offshore at the end of 2013. Burger King has been able to indefinitely defer paying taxes on those profits under U.S. law; by becoming a Canadian company it may never pay U.S. taxes on those profits. In addition, Burger King may avoid an additional $275 million in U.S. taxes between 2015 and 2018 because under Canadian law it will no longer have to pay (even on a deferred basis) U.S. taxes on future worldwide profits.
The report also reveals that Burger King’s largest shareholders could save as much as $820 million in capital gains taxes because of the way the company has structured the inversion.
The report also found that Burger King is the #1 burger chain serving members of the U.S. Armed Forces. It estimates that over the next 15 years, Burger King could receive more than $150 million in royalties and marketing support for its military restaurants.
Social media shareable graphics here, here, and here.
Rep. Sander Levin has introduced a bill to stop corporate inversions. Urge your Representative to support this bill and prevent corporations from deserting America.