Page 9 - Strategic Tax Planning for Global Commerce & Investment

Strategic Tax Planning for Global Commerce and Investment

I . C R O S S B O R D E R T A X P L A N N I N G

S T R A T E G I E S

Globalization and its Impact on Tax Planning

Globalization has been defined as the tendency of businesses to
move beyond domestic and national markets to other markets
around the globe, thereby, increasing the interconnectedness of
different markets

Certain trends, such as movement of capital and labor, the shift
of the manufacturing base from high to low cost and, the
gradual removal of trade barriers, which along with more
subtle ones, such as organizational changes, the globalization of
branding and the ever increasing importance of developing,
protecting and exploiting intellectual property (IP), are having
an impact on the way multinational enterprises (MNEs) are
structured and managed.

At the same time, global competition, upward pressure on
production and operating costs and the escalating cost of
research and development (R&D) result in downward pressure
on margins and profitability.

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