Value chain analysis: sustainable tax rate simulation

Can your organisation accurately measure and control the sources of sustained competitive advantage?

And are you able to respond to the increasing need of the tax authorities to understand that transfer pricing outcomes and value creation are aligned?

Your challenges

Due to global developments in transparency, protectionism and tax policy versus tax politics, the traditional focus on measuring the effective tax rate (ETR) is no longer sufficient. Organisations need to shift to looking into their sustainable tax rate (STR), with a focus on measuring and controlling the total tax cost of doing business. Failure to do so can lead to a focus on short term compliance over strategic priorities and a lack of transparency causing brand erosion. 

As the tax landscape becomes increasingly complex, the risk of double taxation increases every day. Only integrated teams of HR, legal, tax, IT, finance and business can limit this exposure. Complexity also comes with compliance.

Can you measure the  day-to-day costs of compliance tied to your employees, advisors, IT systems and hidden costs?

PwC will conduct a value chain analysis to help you build a sustainable tax rate

How we can help

We’ll conduct an in-depth value chain analysis (VCA) for a comprehensive overview of your company’s value drivers by assessing your organisation against industry peers (namely other multinational organisations). The VCA results enable you to make decisions based on current industry standards and share with tax authorities objective documentation built from public knowledge. Internally, you can use the VCA to support transfer pricing documentation and to help make informed business decisions.

Our unique approach uses simple economics and unbiased, publicly available information to benchmark your organisation against your competitors and identify profit drivers across the value chain. Following the VCA, our tax specialists will work closely with you to fill the gaps and to move from an effective to a sustainable tax rate.