Burger King latest to move address out of US
Published 9:30 am Wednesday, August 27, 2014
WASHINGTON — Burger King plans to become the latest U.S. company to shift its legal address out of the country by merging with a foreign company. Burger King has announced plans to buy Tim Hortons, the Canadian coffee-and-doughnut chain.
Burger King’s operations will stay in Miami. But the corporate headquarters of the new company will be in Canada.
The transaction is called a corporate inversion, a maneuver that is becoming popular among companies looking to lower their tax bills.
Burger King stressed that the deal is being driven by the international growth possibilities of Tim Hortons, not a desire to take advantage of Canada’s lower tax rates.
Still, at least one senator — Democrat Sherrod Brown of Ohio — is urging fast-food patrons to take their business elsewhere, to Wendy’s or White Castle, two fast-food chains that happen to be based in Ohio.
What is a corporate inversion?
An inversion happens when a U.S. corporation and a foreign company merge, with the new parent company based in the foreign country. For tax purposes, the U.S. company becomes foreign-owned, even if all the executives and operations stay in the U.S.