Tax authorities want to understand more about the value creation story of a business to ensure profits are being taxed where the value is created. In many countries, particularly those like the UK that follow the OECD guidelines, there is a requirement to explain your value creation story in your transfer pricing documentation.
For international companies any changes in business model can change the tax profile in one or more of the countries.
Value Chain analysis
A value chain tax review will help you understand how value creation is aligned with the tax profile of the group. The analysis can be used proactively to inform tax authorities and other stakeholders and to pre-empt questions. A value chain analysis is a cornerstone of an effective tax strategy and an essential tool to support reporting.
There are many commercial factors that can drive companies or groups to reshape or restructure their business model and value chain. New market opportunities, or potentially events like Brexit, could be driving changes that have substantial tax implications. We will help you model how proposed changes affect the tax burden across your value chain so that you can establish cost-effective and compliant business structures.
As key member of the BDO International network operating in over 160 countries, we can help you identify, understand and manage the tax costs of changes in your value chain by:
- Telling the value creation story by working with you to identify key drivers of business profit and principal contributions to this value across the group
- Identifying how business change impacts the value chain – e.g. entry into a new market, changes in ownership of intangible assets, new parties controlling and bearing risk
- Establishing transfer prices that align with the value creation.
Working with us on your value chain
The most effective and productive value chain analyses are completed by commercial and tax teams working together from the start. We will build a thorough understanding of all the issues and challenges and your business environment by working closely with your team. Together, we can then plan and create value chains that achieve your commercial goals in a compliant and cost-efficient way.
Global Tax Outlook 2023
Welcome to the 2023 edition of BDO’s Global Tax Outlook.
Tax has an ever increasingly important role to play in how the globe, region, and each country, confronts the turbulence in the global economy over the coming years. Global Tax Outlook 2023 reveals some clear trends, threats, and opportunities, that are emerging in the tax-world.