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Value Chain Alignment (VCA)

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The global economic environment is characterized by continuous improvements in technology, an urgency to adopt and implement best practices and processes, and significant legislative change. Assessing a multinational’s global business model is no longer an optional exercise. Value Chain Alignment (VCA) is the process of understanding the demands of operations and of tax law and integrating them into the business model. Deloitte provides high quality, customized tax and Value Chain Alignment (VCA) services that focus on helping multinationals integrate operational and tax requirements in a scalable and sustainable way in order to help business leaders to make effective decisions on an after-tax basis.

Deloitte delivers Value Chain Alignment (VCA) services using the VCA Insight methodology, a set of experience-based approaches to developing solutions to a range of tax issues and opportunities.

The challenge

The alignment of a multinational company's operating model and its global tax objectives is an important step in enhancing corporate profitability and shareholder value.

Business leaders often have to make tough choices when faced with competing priorities such as competitive pressure in the market and the internal desire for growth, regulatory constraints, and increased public scrutiny.

Currently, these challenges are compounded by the uncertainty of a changing landscape, the recent US Tax Reform being a prime example. Another challenge arises by way of OECD's Base Erosion Profit Shift (BEPS) project which is bringing widespread regulatory and treaty changes across many jurisdictions.

Increased public transparency and new compliance obligations will present fundamentally new challenges for multinationals operating across multiple jurisdictions.

The solution

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

Even if your business has undertaken a Value Chain Alignment (VCA) project in the past, now is the time to re-evaluate your strategy and choices to confirm you will have a sustainable model, that still makes sense in the new reset tax world.

Developing a tax model that is not based on operations runs the risk of curtailing the bottom line, and a business model that does not take tax into account may end up surrendering some or all of the profit it creates.