As Burger King moves its headquarters to Canada over the next three years the fast food giant will save more than a billion dollars in taxes.
The amount of savings comes from a new report by Americans for Tax Fairness, a tax watchdog often critical of corporate tax maneuvers. Most of this savings will come from forgone capital gains taxes, which could amount up to $820 million between now and 2018 for the company's shareholders if Burger King were not to reincorporate. Another estimated $100 million or more will likey be saved in federal taxes.
It's difficult to know exactly how much a company is saving from taxes when, like Burger King, it operates all around the world. The watchdog group is eying Burger King, trying to monitor the intentions of the corporation.
"Burger King's inversion adds up to a 'whopper' of a tax dodge," the watchdog concluded in the report.
Since Burger King announced it was going to buy out Tim Hortons for $11 billion, the company was scrutinized for being driven mainly by the new tax benefits from shifting its corporate citizenship from the U.S. to Canada.
In the months since the allegations of tax-dodging, Burger King continues to deny the claims.
"As we've said all along, this transaction is driven by growth, not tax rates," the company said in a statement. "Going forward, we do not expect our tax rate to change materially."
Dodging taxes is a dangerous move for a company, especially if it's as substantial as the predictions of Americans for Tax Fairness, because the company will likely see backlash where it originated, reported Washington Post, citing how Starbucks saw a sales dip in the United Kingdom when consumers learned the company was using complex accounting methods to pay less in taxes there.
