The big news on Monday has been reports that Burger King is in talks to acquire Tim Hortons, Canada's most popular coffee chain.

According to a recent KPMG study, Canada is one of the most business-friendly countries in the world. At least, when you look at the total tax cost for companies operating in some of the world's biggest economies.

KPMG examined the tax costs of doing business in 10 major economies: Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom, and the United States.

Using the U.S. tax rate as a benchmark of 100, the report found that Canada has the lowest total tax costs, with costs coming in 46.4% lower than those in the U.S.

To find the total tax costs, the report weighed corporate income taxes, property taxes, capital taxes, sales taxes, miscellaneous local business taxes, and statutory labor costs in each country.

So, a company's total tax cost is about more than just the effective rate it pays.

And on the basis of simply an effective tax rate, Burger King wouldn't appear to be getting that much of a break in acquiring Tim Hortons. This table from KPMG shows the corporate tax rate in Canada is 26.5%, which compares with 40% for the U.S.

According to Burger King's most recent 10-K, in 2013 the company's effective tax rate was 27.5%, so not much higher than the Canadian corporate tax rate.

But Burger King is run by a 33-year old alumnus of the private equity firm — 3G Capital — which bought out Burger King in 2010 and took it public in 2012, and its management certainly knows that tax costs are about more than just the advertised rate.

This table from KPMG shows how countries stack up in total tax index.

And this is what those differences look like in chart form.



