Global planning

Companies that develop a global tax strategy can ensure a competitive advantage by a reduction in their tax burden

Imagine you are the tax director of a Canadian corporation. You arrive at your office on Monday morning and an e-mail message from the company's president is waiting for you: "Just clinched a great deal to purchase an operation in Latin America. Please see me this afternoon to discuss any tax issues." Over the next several days, however, enthusiasm turns sour as the company discovers its return on investment will be much less than expected, due to high corporate and capital taxes in the target country and a substantial tax cost in repatriating earnings. …