The EU’s second-highest court overturned a 2016 ruling ordering Apple to pay Irish tax authorities 13 billion euros for receiving undue tax benefits. Multinationals should beware of taking the ruling as a sign the world of international taxation is reverting to an earlier era.
In a recent post, we addressed the subject of what to ask before winding down a legal entity abroad. Here we look at what to expect after you’ve decided to move forward with dissolving an entity, and we explore some real-life examples.
There are real benefits to regularly reviewing an organization’s structure to uncover possible efficiencies, some of which might be brought on by dissolving certain legal entities. This post lists some important questions to ask when deciding whether to wind down an entity abroad.
On August 30, 2016, the European Commission found that Ireland granted illegal tax benefits to Apple Inc., and demanded that Apple repay €13 billion to Irish tax authorities. We provide a clear, concise summary of the situation and tell you what you need to consider in the wake of the ruling.
US companies are expanding into international markets at unprecedented rates. Whether through acquisition, organic growth, or a combination of both, companies are attempting to capitalize on market opportunities as quickly as possible. This desire for speed, however, can translate into overly aggressive large-scale expansion efforts that lack proper planning and ignore pertinent business risks and financial and administrative burdens. Over time, companies may become saddled with complex organizational structures that are inefficient, ineffective and costly to maintain. These needlessly complex legal entity structures can drain a company of much-needed cash, reduce profitability and introduce unnecessary risks.
Since international business ventures don’t always go as planned, a business considering global expansion should understand the costs and time associated with winding down host-country operations in the event that corporate strategy changes.
While it’s true that international expansion will likely present you with a host of costs, demands on resources and other challenges you’ve never encountered before, so many businesses are expanding globally for one obvious reason: The benefits of the expansion far outweigh the costs.
For American and European retailers in a still-struggling economy, the imperative to grow can be as hard to fulfill as it is hard to ignore. Cash-strapped shoppers are still not opening their wallets, as evidenced by the drop in U.S. retail sales last year. As a result, more and more retailers of all shapes and sizes are going abroad to sustain their growth. And it’s a wide-open playing field.
This October, Wal-Mart announced the premature end of its joint venture with retailer Bharti Enterprises in India and the indefinite suspension of its retail plans there. It’s a telling sign that despite government efforts to solicit foreign direct investment – especially in retail – there remain significant obstacles for outside firms hoping to reach the Indian market.
by Dafydd Williams, Senior Director Advisory Services APAC
By Rich de la Rosa, Director, Advisory Services, Americas