The BEPS ripple effect

Multinationals are reevaluating how and where they do business

On its face, the global initiative to address base erosion and profit shifting—commonly referred to as BEPS—is about taxes. That is, national tax authorities around the world are trying to prevent multinationals from structuring their affairs in a manner that results in stateless income or income subject to very little tax. 

Savvy executives know that BEPS isn’t the only force causing multinationals to reevaluate how they structure and operate their business. As we embark on the age of always-on consumerism, increasing demands for customization, an ever-increasing shift towards e-commerce, and expectations trending to same-day delivery, new demands are being placed on organizations to be nimble, cost efficient, and adaptable. At the same time, the service economy and exponential advances in technology allow smaller, more digitally oriented competitors to enter the market with lower barriers to entry, while larger organizations continue to morph industry lines as more and more compete to become platform companies. 

The implementation of OECD BEPS recommendations around the world is driving multinationals to consider redesigning their value chain to align with the new global standards. At the same time, there are similar pressures being driven by the changes in consumer expectations and technological advances being adopted to help meet those demands. Either way, there’s no getting around it—realigning a company’s value chain to adapt to these new realities is an incredibly complex undertaking with significant risks and rewards. 

KPMG’s Value Management services help companies enhance their value and secure competitive advantage by achieving supply chain and operating model efficiencies. Our Value Management services are led by an integrated team of professionals from our Advisory and Tax practices with years of combined operations experience. Our Value Management Center of Excellence combines these cross-functional teams, technology, and process accelerators to help companies execute on growth opportunities, reduce cost and risk, enhance return on investment, and drive efficiencies across operations.