We have recently seen major disruptions to MNE value chains as a result of the COVID pandemic, the war in Ukraine and climate change. To stay competitive, multinational enterprises (MNEs) must constantly adapt their value chains to take account of these changes.
Changes to supply and the value chain are also driven by:
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The ongoing digitalization of products (the Internet of Things, new services such as SAAS, PAAS, cloud technology, etc.)
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Operations (new e-routes to markets, artificial intelligence, industry 4.0, digital centers of excellence)
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Environmental, social and governance initiatives
These changes mean that the value creation of MNEs is always in flux and may lead to MNEs having to regularly restructure their business.
Value chain changes and taxation of MNEs
Needless to say, any major restructuring of the value chain has a serious impact on the taxation of MNEs, both on a one-off and ongoing basis. MNEs therefore need to consider the following tax aspects:
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One-off exit tax in the event of cross-border transfers of assets
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New transfer pricing policies for the altered value chain or new products
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Undesirable cross-border taxable presence (permanent establishment)
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Indirect tax, e.g. VAT and customs duties, due to changes in physical and invoicing flows or in the nature of products
Contact us about VCM and Transfer pricing
KPMG Meijburg & Co’s team of Value Chain Management (VCM) specialists would be happy to help you assess and mitigate challenging transfer pricing tax risks and make sure that you are taking advantage of tax opportunities with regard to transfer pricing. Meijburg & Co has developed a proven, structured process to efficiently set up an optimal operating model. Our VCM team delivers the best solutions for your organization.
