Benefits of tax effective supply chain restructuring

Today’s executives in multinational companies tend to carefully consider business and tax implications when (re)organizing their supply chain. Improvements in technology increased information availability and enhanced the potential for long-distance management. As a result, the landscape for structuring international supply chains and operations has changed significantly: Often, production and sales are transformed into separate subcontractors for a (regionally) centralized principal organization. This enables multinationals to capture business efficiencies and to explore a more tax effective structure. The Organisation for Economic Co-operation and Development (OECD) advises authorities to allow for business restructuring with envisaged tax savings only when it is considered ‘commercially rational’.

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