Canada Seeks to Lure U.S. Businesses with Lower Corporate Taxes
By: CFO August 29, 2014
With Burger King planning to relocate there after completing its buy of coffee-and-donut chain Tim Hortons for about $11.4bn, Canada is emerging as the latest tax haven for U.S. firms fleeing a high tax code at home.
Despite likely objections here to the latest tax inversion deal, Canada is setting out a welcome mat for the newest American corporate transplant. Itís also inviting others to follow. Having slashed its tax rates by about a quarter the past eight years, Canada has no problem with U.S. firms seeking tax shelter there. They like it and see it as being good for business.
The incentive for U.S. firms to set up shop in Canada is that the government only taxes corporate income generated within the countryís borders. Thatís in marked contract to the situation in the United States, where profits earned by an American firmís foreign operations are taxed if theyíre repatriated.