Despite claims to the contrary from both companies, an influential U.S. activist group says Burger King is set to bank hundreds of millions of dollars in tax savings from its merger with Canadian coffee and donut chain Tim Hortons.

In a report titled "Whopper Of A Tax Dodge," Americans For Tax Fairness (ATF) says the U.S. burger chain stands to pocket between $400 million and $1.2 billion in tax savings over the next three years from its deal to take over Tims.

The report came the same day the deal to create a quick-serve behemoth with $23 billion in sales from over 100 countries is set to be finalized. Shareholders and regulators on both sides of the border have given their OK to the deal.

The new company will be headquartered in Canada, which on the whole has lower corporate taxes than the U.S. — although Burger King paid 27.5 per cent last year, roughly the same as the 26.8 per cent tax rate that all-Canadian Tim Hortons says it paid.

Burger King could dodge $117 million in U.S. taxes on profits that it held offshore at the end its last fiscal year, the ATF report says. "Burger King has been able to indefinitely defer paying taxes on those profits under U.S. law; by becoming a Canadian company it may never pay U.S. taxes on those profits."

In addition, Burger King may avoid an additional $275 million in U.S. taxes between 2015 and 2018 because under Canadian law, it will no longer have to pay U.S. taxes on future worldwide profits.

The report also reveals that Burger King’s largest shareholders could save as much as $820 million in capital gains taxes because of the way the company has structured the inversion.

Tax inversion crackdown

The concept of "tax inversions" has been a hot topic this year, as U.S. President Barack Obama and other lawmakers have gone to great lengths to criticize American corporations for engaging in complex foreign takeovers based solely on reducing their tax burdens, not being legitimate corporate transactions.

Both companies insist the deal is not about tax considerations, saying it is a marriage of equal partners with complementary businesses. Burger King says it plans to keep the Tims portion of the business essentially intact, and indeed ramp up expansion plans south of the border.

In a statement on the ATF report, Burger King said Thursday that "the analysis in the report is materially flawed and the figures do not accurately represent our facts and circumstances. As we’ve said all along, this transaction is driven by growth, not tax rates. Going forward, we do not expect our tax rate to change materially."