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Increasing Tax Traps Creating Hazardous Battlefield For Multinationals Seeking International Expansion

Increasing Tax Traps Creating Hazardous Battlefield For Multinationals Seeking International Expansion

Technology key in establishing efficient and effective tax solutions

Companies aspiring to become true, international players face many challenges not least the fact that international tax structuring is becoming more complex than ever.

In recent years, acquisitions have become one of the most hazardous areas. Through a number of case studies, Taxanders from the Germany, Netherlands, UK, US shared insights into how to negotiate this battlefield and the implementation pitfalls to avoid at Taxand's Global Conference 2011, in Paris.{C}

In particular, a number of companies are being forced to overcome the tax traps associated with establishing central finance centres and converting to international reporting standards. The key challenge for the Tax Director in the midst of a Company's international expansion is to get the attention of the CFO and Board by highlighting the impact, which, more than ever before, is frequently running into the tens of millions of dollars in tax exposure.

The solution is to look to technology as tax authorities around the world look to new reporting systems. Embracing technological solutions is at the heart of establishing an efficient and effective tax department that can facilitate international growth. By implementing robust systems that allow the analysis of tax risks in real time, opportunities to optimise tax can be identified and implemented.

A further hazardous area for multinationals is understanding the implications of Transfer Pricing and making sure systems are set up to account for transfer pricing strategy. When this tally is not in place serious cash management can be a consequence.

It is essential that these implementation pitfalls are effectively managed through knowledge sharing, scenario planning and robust technology. But most of all a global view and proactive and energetic management is key.

Frederic Donnedieu de Vabres, Chairman of Taxand, the world's largest independent global organisation of specialist tax advisors to multinational businesses

Your Taxand contact for further queries is:
Abigail Tarren, Global Operations Director
T. +44 (0)207715 5243

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