Senators Urge Burger King Not to Move to Lower-Tax Canada

(Los Angeles Times/MCT) -

Five senators on Thursday urged Burger King Worldwide Inc. not to move to lower-tax Canada, accusing the company of trying to avoid paying its fair share for roads and other public services it receives in the United States.

The letter, organized by Sen. Richard Durbin, D-Ill., was intended to increase pressure on Miami-based Burger King to keep its corporate headquarters in the U.S. and to highlight the off-shore tax-shifting practice known as inversion that President Barack Obama and many Democrats want to limit.

“We believe you will find that turning your back on your loyal, U.S. taxpaying customers by renouncing your corporate citizenship is not in the best interest of Burger King or its shareholders,” the senators wrote to Burger King CEO Daniel Schwartz.

“Many of your loyal customers may choose to spend their hard-earned money at one of your many competitors, instead of supporting a company that wants all the benefits of America but refuses to pay its fair share to support our nation,” the letter said.

The letter, publicly released by Durbin’s office, also was signed by Sens. Carl Levin, D-Mich.; Jack Reed, D-R.I.; Bernard Sanders, I-Vt.; and Sherrod Brown, D-Ohio.

Burger King has become a focus of opponents of inversions, a maneuver in which a U.S. firm buys a smaller rival in a low-tax nation and reincorporates there to shelter earnings.

Burger King said last month it would move corporate headquarters to Canada as part of its purchase of Canadian coffee-and-donut chain Tim Hortons.

The deal was not driven by an attempt to lower its taxes, Burger King executives said, noting that Canada’s rate isn’t significantly lower than the overall tax rate the company paid last year.

Because of Tim Hortons’ extensive presence in Canada, the country would be the largest market for the new combined firm.