As was widely reported a few months ago, Burger King is expected to complete a corporate inversion by purchasing Canadian donut company Tim Horton.
Spinning both companies into subsidiaries of a new, multinational fast-food company headquartered in Canada. New numbers released by tax watchdog Americans for Tax Fairness showed just how much Burger King will be saving after this move.
According to the report, the chain is already using aggressive tax planning to keep its bills as low as possible. As a result, its worldwide tax rate is one of the lowest of any U.S. fast food company at 27.5 percent in 2013. By structuring its international activities around low tax countries and loading costs onto U.S. operations, for example, the company is able to minimize its taxable income in America.
One example of the way that many companies do this is by moving the ownership of brands and logos to a subsidiary in a low tax region and then charging exorbitant rates to “arm’s length” subsidiaries in higher tax regions. This makes it appear that high tax subsidiaries are making little profit while low tax subsidiaries are making a lot.
The report looked into ways that Burger King could use its new status as a Canadian resident to avoid paying what would otherwise be U.S. taxes. It found that the company could avoid paying taxes on its current sum of $499 million in offshore profits – otherwise taxable under the U.S. “worldwide” tax scheme – to save $117. On future foreign earnings, this same change would save the company an estimated $275 million between 2015 and 2018. It also found that the top three holders of Burger King stock could use the unique structure of this deal to save on U.S. capital gains tax. The amount saved could be anywhere between $10 million and $820 million.
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
