Burger King Faces US Tax Backlash On Takeover

Burger King's plan to buy a Canadian coffee and doughnut chain and shift its tax base there has been met with boycott threats among some US customers.

While investors in both Burger King and Tim Hortons showed great appetite for the deal - with shares in both firms rising more than 20% on Monday - some of the burger chain's US customers found the so-called tax inversion aspect - the shifting of a firm's tax base to another country - hard to swallow.

While a tie-up would create the world's third-largest fast food restaurant firm with 18,000 restaurants in 100 countries and about $22bn in sales, it would also significantly cut Burger King's tax burden.

A recent report by KPMG found total tax costs in Canada are 46.4% lower than in the United States.

President Barack Obama and Congress have criticised inversions because they mean a loss of tax revenue for the US government.

Facebook users vent their fury on Burger King's page

White House spokesman Josh Earnest would not comment on Burger King's announcement on Monday, but said the president generally believed it was unfair for companies to pursue a tax inversion merely to pay less in taxes.

By Tuesday morning, Burger King's Facebook page had more than 3,000 mostly negative comments about the potential deal.

One customer, Monica Marsh, wrote: "I eat at Burger King about twice a month or so, but if you buy Tim Hortons and move your headquarters to Canada to reduce how much you pay in American corporate taxes, I will reduce how much I spend of my American dollars and find a new burger joint to frequent."

A representative for Burger King, Miguel Piedra, said the comments on Burger King's Facebook page represented a small fraction of the company's more than seven million followers on the social media site.

Burger King is not the first company to face fallout over a tax inversion.

Pharmaceutical firm AbbVie and Valeant Pharmaceuticals have recently pursued such deals to cut their costs.

Earlier this month, Walgreen abandoned plans to pursue a tax inversion after negative publicity about the planned move.

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