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Burger King Might Become a Canadian Company

The burger behemoth could reincorporate in Canada, and thereby lower its tax liabilities, if it buys donut chain Tim Hortons

Burger King may soon announce a whopper of a deal aimed at lowering its taxes by moving the 60-year-old company’s base outside the U.S., according to a new report.

Citing unnamed sources, the Wall Street Journal reported Sunday that Burger King Worldwide Inc. was “in talks” to buy Canadian donut chain Tim Hortons. The move would allow the hamburger establishment to reincorporate in Canada.

Though legal, the practice known as tax inversion has been criticized in some government circles as a loophole for mega-companies in the U.S. to avoid paying a fair share of taxes for income earned outside the country. Burger King has 13,000 stores in 98 countries, making for a large chunk of international earnings.

Just last month, President Obama had harsh words for this kind of maneuver. “These companies are cherry-picking the rules. And it damages the country’s finances,” he said.

But it might not be taxes alone that sweeten the deal for Burger King, if the Hortons acquisition goes through. BK’s top competitor, McDonalds, has enjoyed success with its own cafe brand McCafe — and the Canadian coffee and donut perveyor could give a boost to the King’s appeal at breakfast time, WSJ reports.


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