Assessing tax: 2010 Tax rate benchmarking study for the Industrial manufacturing 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 industrial manufacturing (IM) 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

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. 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.

About this year's industrial manufacturing benchmarking study

We have reviewed key tax ratios and their drivers for some of the world’s largest listed IM companies (see appendix). This report covers 2008, which was a year of tremendous challenge and change for many of these companies. In the first nine months, some saw strong overall demand and solid growth, in line with previous years. Following the banking crisis in summer 2008, conditions altered dramatically, and the fourth quarter saw a rapidly weakening business climate.

As companies increase their focus on managing tax, many are benchmarking their tax ratios against their peer groups to identify areas for savings. We hope this study provides insight into average key tax ratios for the industry, trends in these ratios over the last three years, and drivers of the ratios.