Burger King Is The Latest Corporation To Consider Renouncing U.S. Citizenship

A Burger King in the Birmingham airport in the United Kingdom. Image via birminghamairport.co.uk

A Burger King in the Birmingham airport in the United Kingdom.
Image via birminghamairport.co.uk

It may be time to let our voices be heard over at Burger King. According to Reuters, Burger King Worldwide, Inc is in talks with Tim Horton’s for a merger which would make the company a subsidiary of the Canadian company and lessen their tax responsibilities here in the United States through a process known as “corporate inversion.”

Burger King Worldwide is in talks to buy Canadian coffee and doughnut chain Tim Horton’s, according to the Wall Street Journal, in a deal that would be structured as a tax inversion to move the hamburger chain’s domicile out of the United States.

Citing people familiar with the matter, the Journal said the two companies are working on a deal to create a new holding company based in Canada and could be struck soon, although more details on the timing could not be learned. (Source)

Not too long ago, Walgreens was considering doing the same thing and moving to Switzerland to avoid about $800 million annually in taxes, despite making approximately $18 billion a year from Medicaid and Medicare alone. After a public outcry, Walgreen’s decided not to do go through with their plans, something that drew the criticism of Fox News.

Based off their financial reports, Burger King Worldwide, Inc (BKW) on the New York Stock Exchange paid $88.5 million for the year ending in 2013 off of $322.2 which comes to a little over 27%. If Burger King bought Tim Horton’s and became a Canadian company, they would be eligible for a lower tax rate under the Canadian tax codes which gives them an effective tax rate anywhere from 11% to 19%, depending on the province.

A 2014 representative tax rate for a CCPC on its first CAD$500,000 of active business income is 15.5% (an 11% federal tax component and a 4.5% provincial tax component). Depending on the province, the 2014 combined active business income tax rate ranges from 11% to 19%. (Source)

Based off my estimates (and I’m not a tax expert or an accountant), Burger King would possibly see their taxes drop in half by moving to Canada on paper, even with the current exchange rate. Basically, Burger King becomes a subsidiary of Tim Horton’s, with management remaining in the United States – and saves $30 million to $50 million annually if my estimates are correct.

This seems to be a mere fraction of what Walgreens was looking at saving and yet Burger King is willing to become a subsidiary of a company from our neighbor to the north over this small savings.

Many of you will say “so what? I don’t eat there regardless” and I get that. I rarely eat fast food due to dietary issues, but the occasional trip to Taco Bell or Burger King for a Double Whopper with cheese, no onion or bun is something I like to indulge in every once in a while. According to their website, Burger King operates about 12,000 locations internationally, with over 7,000 in the United States. Most of these locations are franchises and the company continues to shed ownership of stores as part of a cost-cutting crusade by the new CEO, Daniel Schwartz, who is trying to remake Burger King after years of disappointing sales.

While I understand the need to right a sinking ship, which Burger King has been for many years, becoming a subsidiary of a foreign company to save $30 million to $50 million and bump up the share prices for a quarter or two isn’t the right way to do it.

Since the overwhelming majority of Burger King locations are franchises owned by individuals and local companies, a boycott wouldn’t hit the corporation itself as directly as Walgreens. However, since they make 4.5% in royalties on all sales by franchise, it will still be felt if business slumps, especially since they are attempting to turn the brand around.

Contact Burger King on their website or call them directly at 1-866-394-2493 and let them know if they plan to go through with this inversion, they can also plan to lose your business as well.


Facebook comments

  • Alyce Rosenthal

    Maybe burger king needs an overwhleming vote against their move out of this country.

    • James Brian Thomaston

      Or we could just stop eating their garbage.

      • Stephen Barlow

        I LIKE whoppers! I LOVE double Whoppers with Bacon Letttuce and Tomato.

      • Bine646

        Yeah you love all kinds of meat…

      • Stephen Barlow

        Steak an chicken tits
        Pork …

    • Stephen Barlow

      Maybe Canada should REJECT this deal to keep their tariff free deal for the REST of the Canadian businesses.

  • SeaVHfan

    I never eat their food because it’s unhealthy, but in my opinion, they need to pay US taxes like everyone else.

    • Bine646

      Laissez faire

  • Pipercat

    The bad news of all of this boycott talk will inevitably cause the revenues of antacid makers to plummet!

    • Charles Vincent

      and workforce to shrinkage at BK…

      • Pipercat

        The agita that place dispenses is only surpassed by discomfort suffered in the later stages of digestion…

      • Charles Vincent

        I have some pepto if you need it haha.

  • strayaway

    I just checked. Burger King International (BKE – NYSE) is up 17.21% today. Now I know where to come for inverted stock advice. The decor and service of our local BK leaves something to be desired. The King is creepy. Unlike McDonalds, BK doesn’t always have internet connections and its coffee is not as good. However, BK’s “junior whoppers” are a deal. Why, complain about these companies moving headquarters offshore though if one sees fit to buy a foreign make car that already has its headquarters overseas?

    • Stephen Barlow

      Up 20% a couple days ago. LMAO the KING is like that Redpublican “Uncle Sam” in the gyno room commercial. I saw john Boehner with a 5-6 year old girl in a dress on his lap, playing with his monkey.. and NEVER have I seen him THAT happy.

      The ‘inversion’ should NEVER have been created. HOW does THAT legislation benefit American Citizens who VOTE?

  • mcalkirer

    If they want to move let them we can vote with our dollers.

    • Stephen Barlow

      But $100 bucks in “Happy Meal” losses a year FROM you, doesn’t equal the $300 extra you will have to pay to make up for the 70% loss of Corporate tax revenue they skate on with a SHAM (but legal) Canadian Business License.

      A 50% WHACK TAX on all defectors. THAT will smack them into shape!

  • Grumpmaster_Zz

    Wouldn’t that cause them to become ineligible for the lucrative on-base military contract?

    • Stephen Barlow

      YEAH! i bet it will close 25 stores. out of 18,000. They would lose more if TRUCK STOP CHAINS booted them.

  • merkin

    You order a burger without the bun..?

    • Bine646

      Cant trust a man who eats a burger without the bun- cant do it

      • Stephen Barlow

        hehehe OK. Gotta ASK. WHY NOT?

      • Bine646

        Burger wout a bun is like a sandwich without bread. But I gotta ask, why the capital letters? Relax with those and the “hehe’s”. We are men here Stephen

      • Stephen Barlow

        Both pinkies are in Afghanistan.

      • Stephen Barlow

        I three/2 finger type
        Sometimes My thumbs work.

    • Stephen Barlow

      It’s a low carb diet thing. Either that or Finn is a Pomeranian. I buy My Aussie Sheps bunless burgers when we travel. They actually LISTEN to Me afterwards.

  • Eg Kbbs

    OTOH – just the discussion and plausability of this move to Canada from the USA shows that a country (Canada) can raise the minimum wage and provide a national health insurance and still be competative.

    • BoiseBoy

      No Halliburton to support, so no need to invade other countries, which helps keep costs down.

  • Stephen Barlow

    massive tariff’s and asset seizures will stop this. just write it in the tax code as tax evasion and close the chain.

    • Bine646

      Then we will pick up all the employees on unemployment- fantastic

      • Stephen Barlow

        NOpe, very few people were fired from AIG when it was seized.

      • Bine646

        Your plan will attract alot of business for the US- pffffff

      • Stephen Barlow

        We don’t want tAX FREE business in America. We want tariff’s on nation that help defraud America of fair tax revenue.

        How else do you expect to pay the debt and continue reducing the deficit? Sell Girl Scout Cookies?

      • Bine646

        Make yourself competitive and businesses will come. No one is suggesting a tax free haven, but everyone can agree the corp tax law needs to be revised. If not we will keep losing businesses and our economy will continue along this path

      • Stephen Barlow

        We have been competitive, until NAFTA, anti unionism and vulture capitalists like Romney sucked the life out of American manufacturing. The offshoring of millions of jobs to india and SE Asia, most of them high tech, well paying long term career positions, has effectively cost the American worker a loss of 5% actual wages since 2000 PLUS the losses added by inflation and price gouging by Big oil and Big Agriculture. The pending TPP will be the worst possible calamity for American workers.

        I believe that NO corporation should get a free ride, let alone a REFUND PROFIT!!! An alternative minimum tax on all corporations doing business in America of 12%. Coupled with a slamming shut of 80% of the loopholes to make deductions ‘business necessity only’.

        Lunch meetings @ $1000 a plate – GONE. Strippers, conventions in exotic places – GONE. You can have them on your own taxable dime. Have them in your offices or a conference center near you.

        Stock options are taxed as wages THIS YEAR, same with bonuses. NO more executive apartments for escort outcalls on the taxpayers shoulders.

        RENOVATE the tax code, but making corporations people means TAXING THEM LIKE PEOPLE. So be careful what you ask for.

      • Bine646

        U have so many ideas- when will i see your name on the ballot. LEAVE THE MESSAGE BOARDS N RUN

      • Stephen Barlow

        Thank you for having the honesty to ADMIT I THINK before I type. You should try it some time, just for a lark.

      • Bine646

        I was kidding clown. You spew nonsense on message boards thinking you have all the answers- if you did you wouldnt be on this page youd be consulting businesses on howvto cut costs or working w the govt to revamp the system. Buttttt youre not- keep up the good work buddy

      • Stephen Barlow

        You are to Red Menaceublican to have any kind of humor in you. Part of kidding is FUNNY.

        Nope I retired @ 44. I grow tomatoes for fun an pick snots like you out of the nose of the internet.
        Now THAT’s funny!

        personally, if I found someone worth mentoring, I would, but I live in REDpublica, the part of America where killing unarmed minorities is applauded and if you aren;t the right kind of christian, you are damned and might as well be living Gaza as a Jew.

      • Bine646

        Yawnnnn tell someone who cares

      • Stephen Barlow

        So you admit you Don’t care and are just trying to corrupt a valuable news source.

      • Bine646

        Wait wait wait- are you calling forwardprogressives a valuable news source? BAHAHAHg

      • Stephen Barlow

        Then WHY are you here 24/7?

      • Bine646

        Bc its an opinion site. They are not breaking these stories, Clifton merely writes his asinine opinion on topics or stories which arose days before. Get out of retirement and get w the times- youre fading.

      • Stephen Barlow

        So you admire assinine commentary. Now WONDER your are a REDpublican Menace.

      • Bine646

        Assuming im republican- another clown move

      • Stephen Barlow

        Quacks like a Swan, Walks like a Goose, Eats swamp bird droppings like a Duck… Flys like an Albatross…

        YEP Label yourself a lioness buddybine, but you are a Republican in ANY clothes you choose to take out of your closet.

      • Stephen Barlow

        In you best educated opinion, WHO writes ‘intelligent and relevant opinions’?

        Breitbart’s Ghosts?
        Erickson from RED STATE?
        Anony mouse from TownHall?

        Tell us all what you really think is honest editorial journalism.

      • Stephen Barlow

        NO! NOt everyone agrees that the base rate should change. In fact, most people agree that business should be paying their fair share. The GDP is 2/3 consumer spending, which is more honestly known as CORPORATE REVENUE. Since they take in 67% of the revenue, they should be paying TWICE the total amount of TAX revenue than the workers who pay them for products and services.

  • rossbro

    BK does this, I think it’ll be bad news for them. Sales will drop faster than my pants after eating there.

  • Thomas

    Even bigger of an irony – For practically every military base in the US, the fast food burger joint is Burger King. I say if they want to no longer pay US taxes, they shouldn’t have such exclusive business from our servicemembers either.

  • Finn Weisenbrod

    well I just figured out where I am never going to grab a burger on the go again. I will put up with a lot from a company like this but I am sorry this is to much. A few weeks ago me and my gf went to BK and our meal was absolutely garbage and though I try to eat a lot healthier than fast food I just happened to be really hungry and it was really convenient. I wont be hungry enough to eat at BK again.

  • androphiles

    If they do it I will stop eating there, period.

    • Bine646

      They just did- guess you a free to find another restaurant.

      They pay a 20% tax rate here n will pay the same in Canada. This move expands their business so I do not understand all the crying. Canada, like other countries, have lowered tax rates to attract business- while the US has the highest rate in the world behind Germany

      • androphiles

        I work in the U.S. so I pay U.S. income tax. If I work in two or more states in a year, I pay taxes on both states for that year. What our rates are compared to other countries is irrelevant. If a company works in this country it should pay taxes in this country, whether its “headquarters” are here or elsewhere. Tell me what’s wrong with that thinking.

      • Bine646

        1) Our rates compared to other countries is not irrelevant.
        2) US corp tax rate is the highest out of developed countries and does not employ the UK standard of tax, we use a hybrid system. This means that is a US company generates a profit on foreign soil, it is subject to taxes (if brought back to american soil). The UK system only taxes income which is generated on UK soil. You can see how this puts US corporations at a disadvantage.
        3) Businesses are in business to turn a profit; most business is based on competition. How can a US company compete when its tax rate is nearly double that of the competition?

        For example (Forbes) ““If an American company operates in the United States and Switzerland, its domestic affiliate pays U.S. taxes at 35 percent. But its foreign affiliate pays U.S. taxes at 35 percent and Swiss taxes at 8.5 percent, putting it at a disadvantage vis-à-vis its foreign competitors. America allows companies to deduct the taxes paid to foreign governments from U.S. taxes owed to the Internal Revenue Service, but corporations always pay the full U.S. rate and are unable to take advantage of low-tax jurisdictions.”

        So if you had an opportunity to work in Canada instead of Michigan and could save 15% on taxed income each year you wouldn’t take advantage? Its what being Free is all about

      • Stephen Barlow

        A) Correct. Which is WHY 4 TRILLION dollars of American Corporate PROFIT is untaxed and sitting OFFSHORE.

        B) the BASE rate of 35% is NEVER what even the stupidest sole proprietor pays on his profits.

        C) American companies that do business in any foreign country CAN NOT charge tax on those FOREIGN PROFITS. Check the law.

        D) GHEE?!!? When did Coca-cola have a losing quarter since Warren Buffett first bought shares?

        E) you are LYNG about the FULL 35% tax revenue for businesses. EXPLAIN HOW General Electric managed a $600 Million tax REFUND from the US Treasury IF (as you like to lie about) they PAID 35% of $40 billion in 2012???

        AND NOT
        a US Treasury check for $600 Million

        Answer please .

      • Bine646

        Did I say every company pays 35%? I stated BK pays around 20%. As fpr your point C, companies cannot charge tax on foreign products but they get taxed by our government if that profit touches american soil? Even bigger reason this code needs to be revised- now Stevie, go pop a prozaic and relax, youre getting all stressed out and following me around the MB like a little girl

      • Stephen Barlow

        you SURELY impled THAT!

      • Stephen Barlow

        7% of that is sales tax.

        AND MY POINT is:
        that MAYBE we should CHANGE the tarriifffffffff!

      • Stephen Barlow

        Which really means a 60% pass thru tax on the consumer!

      • Stephen Barlow

        Talk to an accountant. You are only liable for PART TIME RESIDENT taxes on ONLY the part of you income earned in each State. if they have whacked you for 100% of your income by BOTH States….

        YOU need a lawyer and it’s time to sue!

        I fully and totally agree. You do business in America, you PAY for that privilege AT A PREMIUM OVER what American companies pay.

      • Stephen Barlow

        Ever ACTUALLY look at the Canadian tax deduction schedule?

        Strippers, Condos, Private jets… NOT deductible. BK will save a little money. Sure. But They will lose so much business from so many of their loyal American customers…

  • NudeTruth

    Obama’s high taxes chasing away Companies? Gee, didn’t see that coming.

    • Stephen Barlow

      Obama’s taxes are the SAME as the Bush taxes and the Clinton taxes for businesses. EXCEPT for having more LOOPHOLES than Clinton.

  • Matthew Johnson

    Speaking as a Canadian myself… Jesus, when did our “socialist” country get a *lower* corporate tax rate than America?