Managing indirect taxes in rapid-growth markets
Welcome to Managing indirect taxes in rapid-growth markets. In this report, we look at issues and opportunities that multinational companies face in doing business in emerging and fast-growing economies.
Through interviews conducted with clients, investment agencies and our indirect tax professionals who live and work in these countries, we highlight some of the everyday challenges that businesses encounter and how they tackle them in practice, drawing on some of the lessons they have learned and the “leading practices” they have developed.
Since 2008, many developed economies have seen flat or negative growth rates. Multinational businesses have responded by transforming their supply chains to reduce production costs and overheads and to pursue growth in new markets. The emerging markets are not only attracting inward investment, they are also creating a new generation of global traders.
As a result, despite the global economic downturn, overall levels of global trade remain high, and the mix of countries involved is constantly evolving. Business models are also transforming as advances in technology are allowing new goods and services to be designed, manufactured and delivered in new ways.
Indirect taxes include customs duties, excise taxes and taxes on consumption, such as value-added tax (VAT) and goods and services tax (GST). These taxes apply to every stage of the supply chain not only for goods but also for services. Managing these taxes — to reduce costs and avoid errors that lead to penalties and business disruption — is crucial to maintaining profitability. But doing business in new markets is not always easy.
Keeping pace with rapid business developments, changing supply chains, and unfamiliar local laws and practices creates complexity and risk, which can be difficult to manage.
The result can be higher indirect tax costs and elevated indirect tax risk. But opportunities do exist to improve indirect tax performance in these circumstances to sustain growth.
This report is primarily aimed at the people responsible for the tax and finance functions in multinational organizations. But we hope that tax, operations and financial executives will also use it to start and contribute to wider discussions throughout the organization about how best to manage indirect taxes in the global supply chain.
Our comments and insights are chiefly based on the experience of our global networks of indirect tax and incentives professionals and on in-depth interviews conducted with in-house tax executives at a number of international companies as well as governmental agencies.
|Global Director — Indirect Tax|
|Philip Robinson |
+41 58 289 3197
|Americas||Europe, Middle East, India |
and Africa (EMEIA)
|Jeffrey N. Saviano |
+1 212 773 0780 (New York)
+1 617 375 3702 (Boston)
|Gijsbert Bulk |
+31 88 407 11 75
|Jean-Hugues Chabot |
+1 514 874 4345
|Robert Smith |
+86 21 2228 2328