IP Tax Planning For Value Creation

Abstract

With increased globalization, companies enjoy reduced production and delivery costs - this theoretically should lead to increased profits and margins. Balanced against this however, is an increase in global competition and the escalating cost of research and development (R&D), which typically put downward pressure on margins and reduce profitability. To remain competitive, companies therefore need to focus on increasing margins through innovation, improved quality, operational efficiency, effective risk management, etc. Companies are actively reviewing their operational structures and business models in response to an ever evolving and challenging business environment. Operational restructuring, in particular, presents a unique opportunity for companies to implement IP management structures and to introduce efficient tax strategies. However, in today's regulatory environment, one needs to ensure that all tax strategies are sustainable and based on commercial considerations; otherwise, it will be difficult to withstand international tax scrutiny.