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.
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
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!
