Burger King latest corporation to contemplate inversion

Burger King is the latest in a series of high profile companies that have discussed or carried out corporate inversions, whereby a company relocates is headquarters outside the United States so that it can pay less taxes.

Burger King's maneuver would come in the form of a purchase of the Tim Horton's restaurant chain, Canada's biggest seller of donuts and coffee, according to Bloomberg.

While the corporate tax rate in the United States is a bit more than 39 percent, in Canada that rate is 26.5 percent. While the U.S. corporate tax rate is the highest in the world numerically, the large amount of loopholes and exceptions mean a corporation's tax rate can fluctuate wildly from one firm to the next. In some instances, multi-billion dollar corporations actually pay no taxes at all.

Burger King is the first major firm to announce an inversion since President Barack Obama ordered the Departments of Treasury and Commerce to look for ways to slow or stop such maneuvers.

If the acquisition goes through, Bloomberg reports the companies would combine for $22 billion in sales. Those billions would be earned from 18,000 restaurants in more than 100 countries. Tim Horton's and Burger King would operate as separate entities.

The investment firm 3G Capital, which owns a 70 percent stake in Burger King, is the major driving force behind the inversion.

Bloomberg notes that since 2012, 21 companies have begun or completed inversions. That total represents more than half of all the inversions that have taken place since 1980.  

The inversions of large medical companies such as AbbVie and Medtronic in early 2014 thrust the issue into the center of political and business debate.

Tim Horton's is based in the town of Oakville, Ontario. Burger King currently maintains a headquarters in Miami, Florida.