Editor’s note: Kelly Campbell is president and co-founder of Interface Technologies in Raleigh and vice president for technology of the Association for Corporate Growth’s Raleigh-Durham chapter.
RESEARCH TRIANGLE PARK, N.C. – As companies of all sizes expand into global markets and supply chains, the corporate structures they use play an important role maximizing the efficiency of their intellectual, human, and financial capital.
An international panel of tax experts addressed an audience of local executives Thursday at an event hosted by the Raleigh-Durham Chapter of the Association for Corporate Growth.
Moderator Greg Bryant, a partner with Cherry Bekaert & Holland, began the session by using Google as a case study. Google has an overseas tax rate of 2.4 percent. For reference, the U.S. corporate tax rate is 35 percent.
The diagram (listed with this post) illustrates how it works. Customers pay regional offices and Ireland directly. Ireland pays royalties to Netherlands of 90 percent of profits. The Netherlands on-pays 98 percent of the royalties to Bermuda where it is nontaxable.
Each panelist then presented the advantages of doing business in his or her country. Margo Singh, managing partner with Baker Tilly MKM, discussed Dubai, the commercial center of the United Arab Emirates. Boey Yoke Ping, tax partner with Baker Tilly TFW outlined the advantages of doing business in Singapore. Frank Weidema, founding partner of Weidema van Tol, covered Luxembourg and Switzerland. Lou Berger, managing partner with Loyens & Loeff wrapped up with a discussion of The Netherlands.
While each country possesses unique geographic and legal advantages, several common themes emerged.
- Each actively cultivates a business-friendly environment.
- Legal requirements are clearly spelled out and the permit/approval process is streamlined and efficient.
- Of particular note, several of the countries use a ruling based tax system.
Companies submit their tax plans along with their understanding of what their end tax liability will be. The government then issues a legally binding tax ruling specifying that the understanding is correct. This provides companies certainty with respect to their tax matters.
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