The merger is widely described as a “tax inversion” under which the combined company’s headquarters would move to Canada, thereby avoiding higher U.S. taxes on business revenues. Buffett, a long-time advocate for having wealthy individuals pay their fair share of taxes, may be about to stir up a firestorm of negative comments for his contribution to Burger King’s scamper across the border.
Burger King is controlled by 3G Capital, the same firm that partnered with Buffett to acquire H.J. Heinz for $28 billion in 2013. 3G Capital issued about 16% of Burger King’s shares in an IPO in June of 2012, about three-quarters of which were picked up William Ackman and Pershing Square Capital Management.
A report at CNBC cites sources who said that Berkshire Hathaway would pay a full share of U.S. taxes because the combined company would be distributing dividends in the United States. Canada’s corporate tax rate is 26%, compared with the U.S. rate of 35%.