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Supply & Value Chain Tax Advisory

Align operating models and tax strategy to support profitable growth

    

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Aligning a multinational’s operating and business model with its global tax strategy is an important element of profitability and shareholder value. Yet, doing so is challenging given ever changing laws and regulations affecting how companies manage and report tax, and increasingly unpredictable disruptions to supply chains. Deloitte’s supply and value chain tax advisory services can assist with these challenges and support business transformations. We can assist leaders in understanding the tax implications and options available to them, helping capture value created from the business transformation as leaders seek to harmonise business strategy, tax strategy, and operational risks.

Deloitte’s Value Chain Alignment (VCA) methodology begins by analysing your organisation’s operating model, including key business processes and location of key assets and personnel; information systems; and tax and legal structure. Deloitte teams will identify opportunities in the business model analysis phase, including preliminary tax and operational impacts, that business leaders can review against their business strategy.

When a deeper VCA project is appropriate, phase 2 is a design phase when Deloitte specialists and business leadership work together to develop a detailed, tax-efficient operating model. Depending on the value chain opportunity identified, this may include realigning supply chain components, reconfiguring technology systems, readying workforce models, and reorganising tax and legal structures to support the prioritised future state operating model. Typically, we will collaborate with you to use data analytics, advanced modelling, and artificial intelligence to assess and reconcile supply chain transformation decisions to current tax policies.

With the new design in hand, Deloitte teams remain available to support implementation and adoption of processes, helping to monitor the performance and sustainability of your operating model.

As part of the VCA, we can analyse the tax implications of VAT; global trade; transfer pricing standards; and the tax liability arising from various sales channels. A typical outcome is the strategic alignment of supply chain components so that functions and risks reside where they add value from a tax perspective. This can affect physical assets like inventory, manufacturing facilities, and personnel, as well as intellectual property (IP) and intangibles.

Deloitte will also collaborate closely with an organisation’s legal, tax, finance, information technology and HR teams to identify and address any resulting change management issues.

The goal is to provide full visibility into how a value chain operates to support sustainable, profitable growth. Achieving value chain alignment and integrating the supply chain with a global tax strategy can help organisations meet business goals, mitigate risks and increase resiliency.

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Building supply chain resilience

Balance business strategy and tax efficiency for competitive advantage

The events of 2020 have highlighted how the interlinked, global nature of supply chains makes them vulnerable to a range of risks. Spurred by the COVID crisis, many companies are reconfiguring and refining their overall supply chain and risk management strategy taking a more holistic view of potential risk and resiliency.

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Value Chain Alignment
 

Value Chain Alignment is the process of integrating the operating model and global tax structures into the way a business operates. VCA ia all about creating value through business transformation.

Even if your business has undertaken a VCA project in the past, now is the time to reevaluate your strategy and choices to confirm you will have a sustainable model that still makes sense in the new reset tax world.

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