Tax effective value chain management

Reduced trade barriers and significant improvements in technology means that even small, family-owned businesses can operate internationally. But, regardless of your size, to compete internationally you need the right structures in place to reach your target markets and to produce and deliver goods or services efficiently and cost-effectively. A value chain tax analysis can help you determine whether your tax strategy is aligned with the critical activities and assets you rely on to generate profits.

Businesses are finding that by reviewing their organisation’s value chain, they can manage tax risk and achieve significant commercial benefits that drive customer and shareholder value.

Of course, process changes can also have significant tax consequences – particularly if profit-generating activities are being moved from one country to another. Any commercial restructuring within a group is a good time to carry out a value chain tax review.

Value chain analysis and BEPS

Value chain analysis is also an important tool in a post-BEPS world. One of the main aims of the BEPS programme is to tax the profits where the value is created in a group. A robust value chain analysis can help you demonstrate how you operate globally and that your tax structure reflects the commercial realities of how your business operates. In fact an explanation of a group’s value chain is now part of the documentation requirements under the OECD’s new Transfer Pricing Guidelines. A value chain analysis might uncover weaknesses in your transfer pricing approach that require attention. Either way, conducting such an analysis is a useful exercise.

We offer a full range of tax services so whether the restructuring has implications for transfer pricing, international corporate tax, expatriate tax, or indirect tax, we have the expertise you need. Our team of specialists takes a hands-on approach and provides you with coordinated global support as you embark on any business restructurings. And, because of our streamlined organisational structure, you get access to senior-level professionals without layers of bureaucracy.

Our services include:

• Conduct value chain analyses
• Help you identify and evaluate the real value drivers of your business
• Document the value creation story of a business to comply with OECD requirements
• Advise on ways of structuring – or restructuring –  your value chain
• Advise on opportunities to minimise your effective tax rate and risk
• Advise on ways of managing and mitigating the tax consequences of business change and restructuring.