The taxation of international businesses is steadily changing. Around the world, countries do whatever it takes to attract new investment. Falling nominal tax rates and sometimes weak economic backgrounds put new pressure on multinationals to deal with tax audits around the around the world and to optimise their tax planning. That means great opportunities for our clients and busy times for our tax-planning specialists.
Navigating tax regulations
Even for businesses operating in a single country, tax rules are complicated. In multinationals almost every change of regulation or of business processes in one country has an immediate effect on the taxation of the organisation elsewhere.
At Rödl & Partner we note two global trends. Business is becoming more and more international and fluid. At the same time governments are lowering their tax rates to compete with each other. Up to 60% of international trade now takes place within multinational companies. As a result, there is a powerful incentive to ensure profits find their way to a country with a corporate tax rate of, say, 20%, rather than a near neighbour with a rate of 40%.
Recent changes in national laws have tended to put the onus on companies to prove they have complied fully with local tax regulations. As far as transfer pricing is concerned, regulators now step into the internal workings of businesses, setting prescriptive methods for calculating fair prices.
But finding arm’s length prices – especially where there is no external market for the goods or services – is not a precise science. Companies are increasingly service-oriented, deriving value from, and adding value through, their brands, intellectual property and other intangibles.
To steer you through the tax maze, Rödl & Partner assembles an international team under the leadership of a project manager. The team represents all the jurisdictions and tax fields you operate in. Thus we can give comprehensive advice for the whole of your business, not just one part. Our expertise spans tax optimisation, international structuring and investment, as well as calculating transfer prices and negotiating Advance Pricing Agreements.
Increasingly we defend our clients’ interests in tax audits and tax-related judicial proceedings, which they may face simultaneously in several jurisdictions.