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View Diary: Burger King expands realm into Canada (184 comments)

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  •  Does not make sense (1+ / 0-)
    Recommended by:
    RichM

    "some analysts" have said its to take advantage of lower corporate taxes, but the corporate tax rate in Canada is HIGHER than it is in the US. Their corporate tax rate is 38%, vs 36% here. How does this save BK any money on taxes, I just don't get it?

    "crush in its birth the aristocracy of our monied corporations which dare already to challenge our government" -Thomas Jefferson

    by Phil In Denver on Tue Aug 26, 2014 at 10:16:53 AM PDT

    •  You might want to look that up (4+ / 0-)

      The net corporate tax rate is 15%.

      •  Net based on what? (0+ / 0-)

        Deductions of some kind? For corporations, net tax rates here are often much lower than that anyway.

        So when you say net, is that a definitive constant of some kind or is it like it is here, varies based on deductions and so forth?

        "crush in its birth the aristocracy of our monied corporations which dare already to challenge our government" -Thomas Jefferson

        by Phil In Denver on Tue Aug 26, 2014 at 02:30:41 PM PDT

        [ Parent ]

        •  Yes, and no (0+ / 0-)

          The following is assuming the company qualifies, of course.

          The corporate rate is 38% of taxable income. Then you immediately apply a 10% federal tax abatement, taking it down to 28%. Then, if you are a Canadian-controlled corporation, you get a further 13% reduction, taking you down to 15%.

          So yes, it's due to deductions but the deductions are set.

      •  Provincial taxes make it higher (0+ / 0-)

        Canadian provincial income tax rates are generally much higher than US state income tax rates, which narrows the gap considerably.  

        Overall, the transaction structure appears to be driven by a desire not to have Tim Horton's income taxable in the US, not a desire to shelter BK income from US tax.

        "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

        by Old Left Good Left on Wed Aug 27, 2014 at 09:23:31 AM PDT

        [ Parent ]

    •  Tax on global earnings (3+ / 0-)
      Recommended by:
      Naniboujou, armd, VClib

      While some Canadian taxes might be higher they don't tax on what the company earns world wide. That's why companies do the shell companies and transfers of money. If they bring it back to the US they have to pay tax on it.

      A Canadian citizen that works in the US pays US taxes on what they earn here but isn't taxed by Canada for the same thing. A US citizen in Canada has to pay taxes to Canada and the US for the same wage.

      The US is about the only country in the world that does it and its silly.

      •  That part on individual taxes isn't accurate. (0+ / 0-)

        The U.S. and Canada have had an agreement to avoid dual taxation on income since about 1977 or so. The terms of the treaty determine which country you pay, but you don't pay both.

        •  Actually (1+ / 0-)
          Recommended by:
          brightlights

          A US citizen working in Canada is subject to both US and Canadian taxes--the treaty does not override the general rule that a US citizen is taxed on worldwide income.

          However, there are several available options to reduce the effect of double taxation.  There is the foreign earned income exclusion, which exempts from US taxation up to $99,400 of Canadian wages.  A US citizen might receive a credit for foreign income taxes paid, or be able to deduct foreign taxes paid.

          "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

          by Old Left Good Left on Tue Aug 26, 2014 at 05:53:40 PM PDT

          [ Parent ]

        •  howie - individual and corporate US tax codes are (0+ / 0-)

          completely different in every respect and particularly regarding foreign income.

          "let's talk about that" uid 92953

          by VClib on Tue Aug 26, 2014 at 06:00:25 PM PDT

          [ Parent ]

    •  Phil - Canada doesn't try to tax profits earned (0+ / 0-)

      in the US or any other country. It only taxes profits earned in Canada. For a multinational that's what makes being a Canadian company so appealing. The US is the only country that tries to collect taxes on a worldwide basis.

      "let's talk about that" uid 92953

      by VClib on Tue Aug 26, 2014 at 05:58:33 PM PDT

      [ Parent ]

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