Burger King (NYSE:BKW) on the verge of making the U.S government sour


Burger King (NYSE:BKW) has found out a way to tackle taxes in U.S; it will acquire the Canadian Coffee-Doughnuts chain called Tim Horton’s (TSE:THI) and set up the business in Canada. The move has been blasted by the Tax activists but the Burger King (NYSE:BKW) has all the rights to assume the tax nationality of the foreign company it is buying. Lately, many American companies have been opting for this move because they want to cut the overall tax costs which will be implemented in the native country.

The move has also been criticized by the U.S President Barack Obama. Tax activists are claiming that the companies have been avoiding substantial tax returns to the government and are making acquisitions with foreign companies to assume their nationalities. The government has deemed the whole practices ‘heinous’ and ‘un-American’.

However, Burger King (NYSE:BKW) is adamant that every company has the right to expand its business and assume the nationality of the company it acquires. Burger King (NYSE:BKW) also stated that the reason behind setting up the business in Canada was that Tim Horton’s (TSE:THI) is already well known there and associating itself with Tim Horton’s (TSE:THI) would make a great opportunity for Burger King (NYSE:BKW) in Canada.

Burger King (NYSE:BKW) will no longer be subject to the taxes implemented by the U.S government. The company be will saving 275 million dollars this way, which is a huge amount nonetheless. But Burger King (NYSE:BKW) is at risk to tussle with the government and lose its U.S market altogether. The whole matter is being depicted as a political matter, which is unfair to Burger King (NYSE:BKW).

One crucial point we shouldn’t miss is that Burger King (NYSE:BKW) is a top supplier to U.S army and the company becoming a Canadian nationality company will be critical to Burger King (NYSE:BKW). There is also a huge risk that the U.S government ban the company altogether in U.S. Burger King (NYSE:BKW) is currently generating most of the revenue from the U.S market; losing that market will affect Burger King (NYSE:BKW) adversely.

Burger King (NYSE:BKW) is also threatened by the health led restaurants and losing the U.S market could jeopardize the whole revenue of the company. Then again, Burger King (NYSE:BKW) will have the association of Tim Horton’s (TSE:THI) to make its place in Canada, but Burger King (NYSE:BKW) can’t be too certain about that.

Burger King (NYSE:BKW) would have to be very careful when it comes to choosing sides now, because taking a step against the U.S government means that Burger King (NYSE:BKW) will have problems making sales in the native country. In fact, the U.S government will create problems for choosing to skip the U.S taxes and siding with another country. U.S government, along with the president is openly critical about the steps companies are taking in order to skip taxes but little do they know that it isn’t just Burger King (NYSE:BKW), many companies would arise to stand against the taxes imposed.