Page 22 - Strategic Tax Planning for Global Commerce & Investment

Cross Border Tax Planning Strategies

currently generated in high-tax jurisdictions and seeks to move
them to lower-tax jurisdictions. This concept refers to that
portion of corporate profits that legally and within risk
tolerances can be migrated to lower-tax jurisdictions and
permanently deferred from taxation through acceptable tax
planning actions.

Profit migration can be achieved through finance and financial
risk management techniques:

 Finance management approach to profit
migration uses effective capital deploy-
ment and financial risk shifting or sharing
to migrate profits.

 Finance and risk management involves ef-

fective placement or leveraging of capital,
including the use of hybrid entities and in-
struments, dual resident entities and other
tax advantage lending techniques. These
include the creation of debt via intercom-
pany assets or share sales that create inter-
est deductions in high-tax jurisdictions, tax

efficient factoring of receivables and leas-
ing.

An example of business transition for a company is product
and /or service expansion, which is driven by investment in
and/or acquisition of technologies and brands. For many of
these companies their technology or brand assets are major
profit drivers and therefore major tax drivers. Often intangible

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