In this dynamic environment, it is crucial to know exactly where value is created in a company to be able to identify the impact of technology on businesses. While evaluating the degree of digital invasion into your industry may seem to be a matter of strategy, it is also crucial for your intercompany margins.
For instance, assume you are an apparel manufacturer involved in sales through physical stores and outlets who has entered into an APA for five years to fix an intercompany margin approximating to 3% of your overall value chain for a distributor in your company. How will you be able to honor that agreement if in five years’ time, due to increased online sales (reducing the distributor/retailer costs and, therefore, margins), your overall value chain margin is sliced in half?
This is why the “tax” function belongs in the boardroom, to test each strategic move from a risk management perspective.
Issues such as these are now common and unique to each industry after digitalisation has set in and this is where TPA excels. We carry years of experience in understanding traditional and digitalised value chains of businesses, moulding industry specific solutions and advising companies on global tax risk management.
Click on the boxes on top of this page to learn more about which industries we service, how we work with evolving value chains and what is on our digital agenda.