Global markets, new business models, ever-changing operating and regulatory environments, competition, liquidity concerns, the impact of culture, and the influence of new information technologies have made the efficient management of a business on a global scale more complex than ever.
These dynamic factors have made tax planning and compliance for multinational companies (MNCs) more complex, with the need to address and manage multiple objectives on a global scale.
Best-in-class MNCs recognize that to manage these complexities, and to achieve and sustain a competitive worldwide effective tax rate, they need global tax strategies that fully align with corporate strategy, business planning, and the operational footprint - rather than treat tax as an outcome of such strategies to be managed "downstream."
Alignment creates the opportunity for financial efficiencies, improved liquidity, and long-term tax savings. Conversely, a lack of alignment between business strategies and tax planning can result in missed opportunities and can create unnecessary and potentially significant tax risks and costs.
This article addresses three fundamental areas that MNCs must address to achieve an integrated global structure: profit alignment, attribute management, and treasury management.