WASHINGTON – Americans for Tax Fairness (ATF) will publicly release a report Thursday showing that Burger King’s planned “inversion” will allow the company and its leading shareholders to dodge an estimated $400 million to $1.2 billion in US taxes between 2015 and 2018. This contradicts the assertion by CEO Daniel Schwartz that Burger King’s plan to become a Canadian company “is really not about taxes.”
The report is especially topical because Tim Hortons, the Canadian corporation with which Burger King is merging, has announced shareholders will vote on the deal on Tuesday, Dec. 9, and that it expects the deal to close Friday, Dec. 12.
The ATF report finds that by renouncing its US corporate “citizenship” Burger King could dodge $117 million in US taxes on profits that it held offshore at the end of 2013. Burger King has been able to indefinitely defer paying taxes on those profits under US law; by becoming a Canadian company it may never pay US taxes on those profits. In addition, Burger King may avoid an additional $275 million in US taxes between 2015 and 2018 because under Canadian law it will no longer have to pay (even on a deferred basis) US taxes on future worldwide profits.
The report also reveals that Burger King’s largest shareholders could save as much as $820 million in capital gains taxes because of the way the company has structured the inversion.
The report also found that Burger King is the #1 burger chain serving members of the US Armed Forces. It estimates that over the next 15 years, Burger King could receive more than $150 million in royalties and marketing support for its military restaurants.
The report is available today on an embargoed basis and can be found at this link. The embargo will lift at 12:01 AM on Thursday, Dec. 11, and the report also will be posted on this web page at that time.
“Burger King says it’s not really about taxes, said Frank Clemente, executive director of Americans for Tax Fairness. “But the corporation and its shareholders could dodge more than a billion dollars in US taxes over the next few years. It’s not credible to say that a potential tax break of $1 billion didn’t influence its decision to become a Canadian company.”
“Burger King’s decision to renounce its US citizenship and become a Canadian company will mean that while US military families support Burger King by buying its food, Burger King will no longer support service members by paying its fair share of taxes,” added Clemente.
RECENT ATF REPORTS
How Walmart is Dodging Billions in Taxes: And Scheming to Avoid Billions More
Offshoring America’s Drugstore: Walgreens May Move its Corporate Address to a Tax Haven to Avoid Paying Billions in US Taxes
Walmart’s Executive Bonuses Cost Taxpayers Millions
Walmart on Tax Day: How Taxpayers Subsidize America’s Biggest Employer and Richest Family.
Corporate Lobbying on Tax Extenders and the “GE Loophole”
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.