Assessing tax: 2010 Tax rate benchmarking study for the aerospace and defense industry

Assessing tax is an annual benchmarking study that provides a detailed analysis of tax rate metrics and the drivers of these ratios for the aerospace & defense industry. This year's report also includes a special article that discusses several of the Obama administration’s tax proposals and their potential impact on the industries.

About the special report: A closer look at the changing tax environment and key proposals from the Obama administration

Over the past year, PwC has engaged senior tax executives in the industrial products and services industries in regard to the key issues they are facing in the midst of the changing tax and accounting environment. Because of record US budget deficits coupled with high unemployment and slow economic recovery, the administration's tax legislative proposals could have a meaningful impact on US inbound and outbound companies, individuals, and small businesses. They could face more pressure to raise revenue to fully offset the cost of new legislation that increases spending and/or cuts taxes. The discussions we' have had with clients and other tax/industry influencers have helped us identify recurring trends regarding the administration's tax proposals and other critical matters.

Aerospace & defense benchmarking study

This year we have reviewed key tax ratios for some of the world’s largest aerospace & defense companies. The report reflects the start of the worldwide financial downturn — a period marked by the credit crisis and a sudden decline in domestic and overseas demand that led to a severe global recession. Although activity in the defense market remained strong because of continued military spending and security being a priority for many governments, A&D tax executives have significantly increased their focus on managing tax. Many are benchmarking their tax ratios against their peer groups to identify areas for savings. This study provides insight into average effective tax rates, trends in these ratios over the last three years and their drivers, as well as other noteworthy charts and commentary.