Five Questions Every Tax, Treasury and Logistics Executive Should Ask In Light of the Changing International Tax Landscape

Five Questions Every Tax, Treasury and Logistics Executive Should Ask In Light of the Changing International Tax Landscape

Finance executives of U.S. multinational organizations (“MNEs”) should review how the interplay of the following initiatives can impact them: (i) pending U.S. tax reform’s international proposals; (ii) the OECD’s BEPS initiative; and (iii) Brexit.

1. How does the interplay of these three initiatives impact:

  • Tax profile
  • Treasury options
  • Supply chain
  • Corporate structure

2. What areas should be vetted?

  • Identify tax efficient repatriation options
  • Maximize foreign tax credits and after tax cash balances
  • Navigate the potential “one-time tax” on foreign earnings under certain U.S. tax reform proposals
  • Rework EU structures to mitigate IP, finance and supply chain challenges, as well as potential local exit and withholding taxes
  • Evaluate overall impact on tax and financial disclosures

3. What tax attributes should be reviewed?

  • Locate sources and calculate earnings and profits (“E&P”)
  • Calculate foreign tax pools
  • Analyze foreign subsidiary share basis and fair market value

4. What are the key areas of planning considerations?

  • Holding company structures
  • Intellectual property situs
  • Tax attribute utilization
  • Supply chain modification

5. What are my next steps?

  • Review common denominators to evaluate alternatives (i.e., assess inventory of cash, including “trapped” cash; firm up E&P and associated foreign tax pools; analyze share and asset tax basis)
  • Reduce or harvest tax attributes as appropriate
  • Model practical options for repatriation of foreign earnings
  • Identify practical changes to the supply chain that balance the U.S. tax reform proposal’s potential territorial system implementation against the BEPS/EU/Brexit framework
  • Consider approaches to income tax filings and transfer pricing

For more information on the matters discussed above, please contact MFA’s Tax Team.

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