Tax Rates May Drive The King To Canada

Tax Rates May Drive The King To Canada

Surprisingly fast food giant Burger King is taking steps to move north of the border to Canada. According to a recent Forbes article, “Burger King is in talks to buy Canadian coffee-and-doughnut chain Tim Horton’s Inc., a merger that would be structured as a ‘tax inversion’ which would effectively move Burger King’s headquarters to Canada…” The article goes on to state “that Canadian corporate tax rates are favorable relative to American corporate tax rates enough to justify a ‘tax inversion.’”

While the Obama administration and the Treasury are labeling this move as unpatriotic, more and more American corporations are seeking to dodge the excessively high US tax bullet by incorporating in countries with more favorable tax rates. Canada, generally perceived as a nation with more onerous taxes, has created a business-friendly environment promoting this type of “inversion.” With these types of incentives, Canada, and other “inversion-inducing” nations stand to profit from the myriad benefits that corporations bring to their landscapes. Perhaps, instead of crying foul play, the administration can learn a few tricks from those who stand to profit immensely from a competitive tax structure.

 

Click here to read the full Forbes article. 

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