Tax Benchmarking Survey for the Transportation & Logistics Industry: December 2008/2009

Download Tax Benchmarking Survey for the Transportation & Logistics Industry: December 2008 (632 kb)

A current challenge for the tax professional is to identify the right balance when planning for taxes. On one side of thebalance, taxes are a significant cost to the corporation and should be controlled and managed in the quest to createshareholder value and maximize earnings per share. On the other side, the amount of tax paid by large corporations iscoming under increasing scrutiny and stirring public debate.

Tax disclosures in annual reports are an important insight into a company's tax affairs with the effective tax rate(ETR) being the headline rate commonly quoted by chief financial officers when discussing their company's taxaffairs in annual reports. Tax is increasingly found on board room agendas with directors taking a greater interestin their company's tax strategy and how it is being identified and managed. This study will give insight to tax departments as they review their tax strategy, provide information on where they stand compared with their peers,and allow them to compare the drivers of their ETR with other companies. A bespoke presentation can be preparedfor any company on request.

Our financial analysis was based on a number of tax ratios that can be derived from publicly available information. Using publicly available information allowed us to include any listed company, giving us a good overview from which to drawour conclusions. It is important to note that our study shows a high-level picture of key tax ratios. The data are sourced from a data provider and checked to annual reports for quality assurance. We have not adjusted for one-off distortingitems or losses. (Our in-depth tax rate benchmarking studies, carried out on smaller peer groups, drill down to underlyingor adjusted ETR). In this study, losses, tax refunds, and exceptional items can be drivers of the individual company ETR, although by taking a statistically trimmed sample, the impact of these on the study conclusions are minimized. In this report, we present the results of the survey. Our population comprises 58 of the largest transportation logistics companies. The companies are based in the following territories: United States - 20 companies, Canada - two companies, Europe - 14 companies, Japan - six companies, China - seven companies, Other Asia-Pacific - nine companies. This report summarizes the findings from benchmarking key financial indicators for tax for the past three years. All information is taken from publicly available financial statements spanning the period from January 2005 toJune 2008. The charts show the year ends to be 2005, 2006, and 2007. Ten companies within our sample had already filed accounts for their 2008 year-ends, and these results have been included in our 2007 averages.