Many projects run by Australian companies involve the global procurement of goods and movement of those goods into various countries for construction and modularisation prior to installation in Australia.
Worldwide goods and services taxes (GST) and value added taxes (VAT), customs duties, withholding taxes, and transfer pricing implications can result in embedded tax along each step of the supply chain.
Regardless of the size of your project, incorporating tax planning into the design of supply chain structures can provide visibility over the tax burden and generate cost savings by, for example:
- providing an opportunity to structure contracts with suppliers and contractors to appropriately assign tax risk and responsibility between the parties
- creating obligations for contractors to apply for and pass on available tax concessions, refunds or credits to the project owner
- avoiding the use of Incoterms that are likely to create a foreign tax liability
- setting up processes and procedures to quantify any tax incurred, seek available tax refunds, and meet withholding tax requirements.
Businesses that would like to discuss tax efficient supply chain management, please contact me or your local KPMG indirect tax adviser.