The document discusses the evolution of international taxation amidst globalization, highlighting the shift towards tax-efficient structures for multinational companies. It outlines challenges in designing tax-efficient supply chains, the importance of setting clear objectives, and the UK's attractiveness for international business due to its reduced tax rates and favorable regulatory environment. The future of tax planning will be dictated by increasing compliance burdens, BEPS legislation, and the necessity for substantial business justification in tax arrangements.

1. The Evolution of International Taxation
2 Decades of High -Tech Restructuring
Gary Howlett
Global Tax Director
Kaspersky Lab

2. Career to Date – Why High Tech?
. . .

3. How to ensure consistency with
overall business strategy
Globalisation in the last 20 years has resulted in the majority of multi-
nationals moving to functional management structures and away from a
local MD managing all functions in a country. This change created an
opportunity to relocate regional/global functions to tax efficient locations.
Business substance at the Principal Company has always been important but
BEPS will make this increasingly key to sustaining any tax advantages &
possibly still will not be sufficient.
Any significant business
restructuring should be done
primarily for commercial
reasons although tax
consequences can make a
material difference to the
cost/benefit analysis
Supply chain restructuring drivers include:
• Inventory management
• Reduction of intercompany transactions
• Management of trade receivables

4. What are the challenges of designing
a tax efficient supply chain structure?
 Obtain the appropriate resources
 Ensure Board/Executive management buy-in and have the Business
responsible for operational aspects of the project
 Obtain a realistic project budget
 IT requirements – systems changes?
 Recommend dedicated project manager(s)
 Ensure feasibility study identifies key issues
 Have a realistic risk assessment of possible issues
 Be prepared to change the “strawman” structure if necessary
 Ensure any key assumptions are agreed by Executive Management
 Consider exit provisions when negotiating tax rulings
 Consider tax claw-back clauses / WHT on repatriation of profits

5. Consultants – part of the team and
a key to a successful implementation
• Select consultants that have practical experience
• Speak to their clients that have implemented similar projects
• Obtain fixed fee for implementation and try to identify areas that
may be out of scope up front.
• If a country is material to the financial plan, visit the consultants in
the local country to discuss issues; a meeting can indicate a
different level of risk than written/telephone advice.

6. What defines the success or failure of
a major corporate relocation?
Agree clear
project
objectives
- Business objectives
- Tax objectives
- Realistic Timeline
Develop a
communication
plan
- Internal (including
new business policy
documents)
- External
Ensure HR
department is
engaged
- Workers Councils
- Relocation Packages
- Expatriate support
Have a post
implementation
strategy
- Tax audits
- Board Guardrails
- Business changes
- Regulatory changes

7. What makes the UK attractive for
growing International business?
Reduction of the
headline UK tax
rate down to 20%
from 1 April 2015,
down from 28%
relatively recently.
Non-tax factors
include:
- London
- International
transport links
- Language
- Schools
Generous patent
box regime that
taxes IP profits at
10% on a very
broad range of
activities.
Regulatory
Environment
- English Law
- Access to finance
- Reputation for
probity

8. Where next for International
Restructuring & Tax Planning?
 International Restructuring will continue ; in high-tech businesses
change is the norm.
 BEPS project has introduced major tax uncertainty.
 Some restructuring will be required to unwind or make current
structures more robust from challenge
 The tax compliance burden is set to significantly increase putting
pressure on Tax Dept. resources/budgets.
 Avoiding double taxation will become more challenging, particularly
if some countries unilaterally begin implementing BEPS legislation.
 Substance will become increasingly important
 Making company Directors personally responsible will kill aggressive
transfer pricing planning – focus will be on ensuring the “right” level
of profits in each territory
 Future tax planning will focus on utilising available local tax reliefs