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1. The impact of indirect taxes and duties
Advances in communications and transportation, the progress of free trade, the emergence of strong non-Western economies, the coalescence of Western Europe into a European Union, the dissolution of the Soviet Union, and the liberalisation of Communist China have combined to internationalise the world's economy to an unprecedented extent. A myriad of multinational enterprises, large and small, operate in the new world economy. One mistake they consistently make is to underestimate the impact of indirect taxes – above all customs duties and value added tax, but also excise taxes – on the profitability or indeed the very viability of their international operations.
Unlike taxes on income, which are imposed on a net assessment base, customs duties apply to the full value of goods crossing international borders. VAT (including import VAT) applies to the full value of a supply of goods or services. Careful analysis often reveals that, even if VAT is in fact passed along to the final consumer, the impact of customs duties alone on net results equals or surpasses that of direct taxes for merchandising companies. Furthermore, the formality and rigidity which characterise indirect taxes create numerous opportunities for cash-flow inefficiencies and unnecessary payment of tax.
The in-house tax counsel, if not the management, of most multinationals is generally aware that the value added tax is second only to the wage withholding tax as the leading revenue-generator in Germany and throughout most of the EU. But even tax counsel is given to regarding VAT as a tax of secondary concern paid ultimately by final consumers and hence no more than an administrative nuisance for businesses. Even firms without full input tax credit entitlement often ignore ways to improve their situation. Customs duties and the complexities of customs procedures are seen as administratively troublesome matters best handled ad hoc by those whose lot in life it is to fill out and file the associated forms.
This attitude causes many firms to regard customs and VAT as subordinate details to be worked out once the "important" economic and income tax planning decisions have been made. At best, this attitude leads to structures which are unnecessarily costly from an indirect tax perspective. At worst, the economic burden of indirect taxes can demolish an otherwise sound business decision, such as that to move all or part of production operations to another country.
2. Customs and VAT
The following case studies illustrate the importance of indirect taxation. Some case studies are followed by a synopsis of the relevant law. While realistic, the case studies are hypothetical, as are the customs rates and charges used in certain examples.
2.1 Preferential tariff rates
Case 1: exceeding permissible foreign content
Electro Products GmbH assembles cellular telephones in Germany. The GmbH exports 30 % of its production to Hungary, one of its key markets. The Hungarian preferential ad valorem tariff rate for cellular telephones is 4.5 %. The standard tariff rate is 15 %. To qualify for the preferential rate, the cellular telephones must be of EU origin. This is the case if parts of non-EU origin account for no more than 25 % of the ex works price. The purchasing department was informed of this requirement some years back. Ever eager to reduce costs under its continuous cost reduction program, it causes a new chip made in the Philippines to be installed, bringing non-EU parts to 26 % of the ex works price. Customs clearance is handled on the basis of a declaration on the invoice that the goods are of EU origin within the meaning of the preferential agreement. Eighteen months later, the Hungarian authorities, acting on a tip from one of the GmbH's fierce competitors, change the customs assessment retroactively and apply the full tariff rate.
Preferential tariff rates
Inadvertent forfeiture of tariff preferences of the sort described are a common occurrence. Purchasing departments are frequently ignorant of or indifferent to preferences which are important for their firm. Many firms lose track of the requirements for various preferences as time goes by or lack procedures to assess the impact of purchasing changes on tariff preferences. Tracking compliance at least with key preferential agreements can save immense sums and be well worth the cost and effort involved.
The EU applies reduced tariff rates to most commercial products and certain agricultural products entering the EU from countries with which it has entered into a preferential tariff agreement. With the exception of most successor states to the Soviet Union and Yugoslavia, preferential tariff agreements exist with practically all European countries as well as with the non-European countries of the Mediterranean basin and various African, Caribbean, and Pacific countries (ACP countries). Except in the case of the ACP countries, such agreements require reciprocity from the other treaty state. Customs preferences are also accorded unilaterally to certain developing countries.
Entitlement to the various preferences depends on the country of origin of the merchandise. A product's origin is determined under complicated rules. These are to some extent uniform, but can also vary from product to product or depending on the specific preference agreement. Where merchandise, from the raw materials to the finished product, is not sourced in a single country, origin generally depends on the percentage of value added or the degree of processing in a particular country. Frequently, the necessary degree of processing is defined with respect to the value of imported materials compared to the value of the finished product (e.g. price of imported materials not to exceed 25 % of the ex works price of the finished product).
Formally speaking, preference documents (e.g. movement certificates or declarations on the invoice) issued by the seller are the means by which the origin of goods is documented and traced. Even companies not themselves engaged in export can incur liability for issuance of an incorrect preference document (supplier's declaration) if their buyer, in reliance thereon, exports the goods and is denied the expected preferential treatment because the origin of the goods is not as certified. Declarations on the invoice are convenient preference documents for export transactions because they involve no prior review by the customs authorities in the country of export. Their use is, however contingent on prior authorisation and they are more likely to be challenged than movement certificates, which must be stamped by the customs authority in the country of export.
2.2 Customs classification
Case 2: Leaping before one looks
Machine Mfr. GmbH makes a type of machine known to experts as a widget. It receives an order from a renowned Czech firm in Pilsen for delivery and installation of one widget at a cost of DM 25 million plus transportation, labour, handling, etc. As a rule, widgets are classified under a customs code number for which the Czech Republic imposes a tariff of 3 % on goods of EU origin. This was the tariff the GmbH was expecting when it agreed on the price and accepted the term "customs clearance by the seller". Unfortunately, various features of the GmbH's widget cause it to fall into another category, to which a 10 % tariff applies. The extra cost is DM 1.75 million. A huge loss results on the sale.
Mistakes in tariff classification regularly cost large sums of money to the party responsible for customs clearance.
In 1988, the European Union began using the International Harmonised System of Merchandise Designation and Coding (HS). More than 120 countries use this system, which classifies all merchandise using a six digit code. The EU Common Customs Tariff adds two more digits and the German customs administration generally adds an additional three, bringing the total to 11. This nomenclature system is autonomous, that is, it follows its own rules rather than basing its classifications on general trade practice or other German laws. Some goods are therefore medications for purposes of the Medication Law, but foodstuffs under customs law.
The general classification principle is that purpose takes precedence over materials (composition). Correct classification in a case of first impression requires not just knowledge of the customs law, but also detailed product knowledge, sometimes entailing analysis of the process by which a product is produced.
A procedure exists by which an importer can receive a binding ruling from the customs authorities on the classification of goods he intends to import. Such rulings apply throughout the European Union and bind the customs officials of all Member States. Barring changes in the law, a ruling is valid for six years from the time of issuance. Naturally, the validity of a ruling depends on the accuracy of the information supplied to the customs officials.
2.3 Cost factor customs clearance
Case 3: Moving to a low-cost production site
Specialty Production Machines GmbH, located in central Germany, has long been looking for a way to reduce its high labour costs so as to become more competitive. After much study of the labour market in the Czech Republic, the GmbH concludes that it can hire highly skilled machinists and lathe operators there for a fraction of the cost in Germany. It builds a factory in the Czech Republic, equips it with production machinery imported from Germany, and hires mostly Czech labour. Since the market for the finished product is in Germany and the required materials and parts are not available on the Czech market, an average of five trucks cross the border each day in both directions. While the GmbH had considered the freight costs and customs duties in its planning (re-import was duty free under the preference agreement), it was surprised to discover that its freight forwarder was charging it DM 100 customs clearance costs for each border crossing. The daily ten crossings cost DM 1,000 and threatened to exceed DM 300,000 per year. This was something the GmbH had not bargained for, and it turned to the indirect taxation specialists of a major international accounting firm.
Customs clearance costs
Charges by carriers or forwarders for customs clearance are a commonly overlooked significant cost factor. Such charges can vary considerably and are often negotiable. Firms may also be able to handle customs clearance more efficiently themselves.
In the above case, the GmbH was advised to attempt to negotiate a price reduction with the carrier. Furthermore, the GmbH was advised to consider handling its own customs clearance paperwork. Its indirect taxation specialists explained that, provided a certain minimum volume was present, firms could handle their own customs clearing and reduce costs. Software enabling the GmbH to handle its own customs clearances was available from software providers at prices of around DM 20,000. The indirect taxation team was pleased to assist in the selection and implementation of software to suit the client's individual needs. The GmbH was glad it decided to make this investment.
While discussing the above with the GmbH's general manager, the indirect taxation specialists learned that the GmbH also sent machined parts to Russia for processing, assembly, and reimport. They asked whether the GmbH had structured the export and re-import to qualify as outward processing under the relevant EU customs regulations. The manager confessed that this was not the case and inquired what "outward processing" meant in the first place. He learned that, subject to certain requirements, customs duty could be reduced upon re-import of goods and materials exported from the EU to a third country for processing and subsequent re-import. Essentially, the customs value of the goods when exported can be deducted from that of the re-imported product. Since the customs classification and hence the tariff rate generally change as a result of the processing, further modifications apply, but considerable savings are still possible.
The savings reaped by the GmbH after reorganising its Russian exports to qualify as outward processing were several times greater than the original unplanned Czech customs clearance costs, which it reduced drastically with the help of its tax advisors and its new software.
2.4 Import VAT
Case 4: Leasing and import VAT
Medical Machine Inc., a U.S. corporation, manufactures expensive hospital diagnostic equipment. Desiring to break into the lucrative German market, the Inc. forms a wholly owned German subsidiary, Medical Machine GmbH. The Inc.'s American tax advisors recommend that it structure the transaction as a back-to-back lease so as to minimise the GmbH's German income tax liability. The GmbH reaches agreement with a German hospital on this basis. When the machine arrives at the border, the GmbH makes the customs declaration and pays import VAT. It then delivers the machine to the hospital and begins issuing invoices to it with VAT for the monthly leasing payments. It deducts the import VAT on its VAT return. Three years later on audit, the input VAT deduction is denied on the grounds that the GmbH did not acquire title to the machine, this having remained with the Inc. Thereupon, an attempt is made for the Inc. to claim a refund of the import VAT under the refund procedure for non-resident businesses. This fails because the deadline (June 30th of the year following that in which the VAT was paid) has long since expired.
Importance of advance analysis of VAT transactions
Filing a timely refund request with the Federal Finance Office may well be virtually impossible where a foreign party and its domestic subsidiary have failed to analyse their transactions carefully to be certain which party is entitled to the input tax credit on import VAT or even normal VAT. Since the filing deadline is short, mistakes will generally not be discovered until it is too late. This is but one example of situations under the VAT law where problems which are in themselves easily soluble become irreparable because of faulty initial treatment of VAT transactions.
2.5 Limits on harmonisation of VAT inside the EU
All EU countries have VAT laws which purport to be in accordance with the 6th VAT Directive of the European Commission. This is, however, no guarantee against conflicts, as the following examples show.
Case 5: Withdrawal from warehouse (call-off stocks)
Suspension Systems GmbH in Stuttgart manufactures a complete line of fittings for suspending pipes and conduits of all weights, manners, and descriptions from the ceilings of buildings. Its products are easy to install, of high quality, moderately priced, and in such great demand on the German market that it decides to branch out into Holland, where it establishes a warehouse near Utrecht stocked with quantities of its most popular systems. It simultaneously enters into agreements with three Dutch wholesalers of construction materials for them to draw on the warehouse stocks regularly (subject to certain limits) for their needs. Business booms, and a truckload of fittings goes from Stuttgart to Utrecht every week to keep the warehouse stocked.
There are two ways of viewing the above situation:
• German approach: The movement of goods from Stuttgart to the Utrecht warehouse is a so-called "intra-community movement of goods," that is, a transaction by which a business moves goods from one EU country to another while retaining control and possession (§ 3 (1a) UStG). This is a taxable event in Germany, but an exemption applies (§ 6a (2) UStG), provided the formal requirements for the exemption under § 14a (2) UStG are met. These require, essentially, that the business issue a pro forma invoice to itself stating that the transaction is tax exempt as an intra-community movement of goods and giving its German address and German VAT ID number as "consignor" and its foreign address and foreign VAT ID number as "consignee". When the customer withdraws goods from the warehouse, this transaction is a purely internal Dutch supply on which Dutch VAT is owing.
• Dutch approach: Since the customers can pick up goods from the warehouse any time they wish, the movement of goods may also be seen as single delivery by the GmbH in Stuttgart to the Dutch customers. Such a delivery is also a taxable event in Germany and also tax exempt as a so-called "intra-community delivery", that is, a transaction by which a business in one EU country delivers goods to a business in another EU country (§ 6a UStG). The formal requirements for the exemption, while similar to the above, nevertheless differ in decisive respects: The supplier must issue an invoice stating that the transaction is tax exempt as an intra-community delivery and giving its German address and VAT ID number as supplier and the Dutch name, address, and foreign VAT ID number of its customer. The Dutch customer in this case effects a so-called "intra-community acquisition" of goods as the recipient of an intra-community delivery. This is a taxable event in Holland. The Dutch customer would therefore have to remit VAT to the Dutch authorities, which it could claim as its input VAT.
The best solution to the above conflict, which can occur with other countries besides Holland, is to be prepared from the start to satisfy both the Dutch and the German tax authorities. This assumes that the conflict has been detected in advance. Even then, there is a problem. From the Dutch perspective, the GmbH effects no supplies in Holland since the intra-community delivery is deemed to occur in Germany. Hence, the Dutch authorities may not issue a VAT ID number to the GmbH. Without this number, the GmbH's intra-community movement of goods will trigger German VAT from the German perspective since it must show its Dutch VAT ID number on the pro forma invoice in order to escape tax on its intra-community movement of goods. The GmbH may have to expand its Dutch operations to be sure to secure a VAT ID number. It may also be possible to negotiate a solution with the German and Dutch tax authorities.
Case 6: Intra-community triangular sale
Dutch Buyer C in Amsterdam contacts French Dealer B in Paris to purchase one widget. French Dealer is registered in Germany for VAT purposes and has a German VAT ID number. French Dealer purchases the widget from German Manufacturer A in Berlin, who, at French Dealer's request, ships the widget directly to Dutch Buyer in Amsterdam via UPS. German Manufacturer sends an invoice to French Dealer quoting its buyer's French VAT ID number. French Dealer sends an invoice to Dutch Dealer quoting its buyer's Dutch VAT ID number.
Again, there are two ways of viewing the above situation:
• German approach: The transaction is an intra-community triangular sale qualifying for special (simplified) VAT treatment under § 25b UStG. Mfr.-A in Germany is deemed to have delivered to Dealer-B in France who delivers to Buyer-C in Holland. The delivery from Mfr.-A to Dealer-B takes place where shipment of the goods begins (Berlin) and is tax free. The delivery by Dealer-B to Buyer-C takes place in Holland, where the shipment ends. Dealer-B effects an intra-community acquisition in Holland, which is, however, also (in effect) tax free. VAT on the delivery by B to C is shifted to Buyer-C, who has an input VAT deduction in like amount.
• Dutch and French approach: The transaction cannot qualify as an intra-community triangular sale because Dealer-B is registered in Germany (the country where the shipment begins) in addition to France. The VAT law of Holland and France thus differs from that of Germany, which requires only that the business in the middle not be registered where the shipment ends (Holland). Hence, France and Holland treat the transaction under the standard rules as a taxable domestic delivery by Mfr.-A to Dealer-B followed by an intra-community delivery by Dealer-B to Buyer-C. The intra-community delivery is tax free; Buyer-C owes VAT on its intra-community acquisition.
While the two views reach similar results (Dutch VAT owing by Buyer-C in Holland), the reasoning is different and the formal requirements are different. Also, intra-community deliveries and acquisitions must be reported to the tax authorities for statistical purposes, subject to penalties for non-compliance. It is not possible to report the above transactions properly from the perspective of all tax authorities involved. Conceivably, the Dutch buyer could be denied an input tax credit on tax paid if this was paid under the German theory of the transaction. The general confusion resulting from the conflicting treatments could trigger tax audits of the firms involved.
Besides the above formal problems, double taxation can result if the above situation is reversed: German Buyer A orders goods from French Dealer B, who is also registered in Holland and in turn orders from Dutch Manufacturer C.
3. Energy taxes and other excise taxes
3.1 Excise taxes in general
Excise taxes are also included in the category of indirect taxes. The principal German excise taxes are as follows:
• Electric energy tax
• Mineral oil tax
• Alcoholic beverage taxes
• Tobacco tax
• Coffee tax
Increases in the electric energy tax and the mineral oil tax are the cornerstones of the program of "ecological taxation" initiated by the present government after taking office in the autumn of 1998 (see articles nos. 168 and 188).
Indirect collection is characteristic of the above taxes. Companies trading in commodities subject to excise taxation need to plan their operations with knowledge of all procedural and substantive aspects of these taxes. Companies consuming significant amounts of energy will likewise have to consider the economic impact of these taxes on their operations and weigh options to reduce the burden of their energy taxes.
3.2 Energy tax case study
Revenue from the Mineral Oil Tax exceeds that from the corporation tax by roughly DM 27 billion annually. The Mineral Oil Tax is exceedingly complex and imposed at a variety of rates depending on the type of fuel used and the purposes to which it is put. Total revenue from the new tax on electric energy is scheduled to rise by phases to half that of the corporation tax. Both laws provide for numerous exceptions, exemptions, and reduced rates. Often, firms are entitled to one of these tax breaks without knowing it. Again, formal requirements play a big role.
Case 7: Press Shop GmbH
Press Shop GmbH in Frankfurt manufactures specialised stamped metal parts for various German automobile manufacturers. Although clearly a "producing commercial enterprise" within the meaning of the new electric energy tax, it fails to apply for authorisation to pay tax at a reduced rate on its electric energy consumption. In early January 2000, after the Christmas break, it finally files its application. This is granted three months later, retroactive to the date of the application even though the statute indicates that an authorisation is valid only from the date of issue. In view of the long processing delay, the Frankfurt Main Customs Office makes an exception (in this hypothetical example, though perhaps not in real life). Even so, the difference between taxes at the reduced and full rates from 1 April 1999 to 31 December 1999 is DM 600,000.
Had the GmbH filed by the end of 1999, its authorisation would have been retroactive to 1 April 1999.
4. KPMG's indirect tax consulting services
4.1 Focus of indirect consulting services
Working in cooperation with similar groups in other KPMG companies around the world, KPMG Germany has assembled teams of experts in the area of indirect taxation. The expertise available in these teams covers European customs law and all indirect taxes, including foreign customs and indirect taxation laws with the aid of other KPMG member companies. The main focus is on the needs of the following client groups:
• Clients with international production and merchandising operations (optimisation of supply chain management, choice of location for a European distribution centre, review of customs valuations, VAT and customs analysis of chain transactions, shift from buy–sell to commission agent marketing structure, cost-sharing arrangements, reporting requirements, documentation management, computer systems)
• Clients with production sites in foreign countries (determining import and export customs costs, planning to satisfy goods origin and preference agreement requirements, avoidance of customs duties through customs warehouses or passive/active processing arrangements, planning efficient flow of goods and materials, VAT registration, input tax credits, VAT reporting requirements)
• Software developers and software marketing companies (VAT aspects of software development, cost sharing arrangements, marketing structures)
• Recipients of EU subsidies (export, production, and processing subsidies; EU market organisation law)
• Companies which produce or trade in commodities subject to excise taxes (electric energy, petrol, diesel, heating oil, natural gas, alcohol, tobacco, coffee)
4.2 Customs law services
Customs law comprises a multitude of different provisions belonging to a variety of related bodies of law, the most important of which are as follows:
• Customs valuation
• Tariff classification
• Anti-dumping law
• Preferential treatment for goods of certain origin
• Market regulation
• Excise duties
• Foreign trade law
• External and internal trade statistics
We provide the following services with respect to the above bodies of law:
• Customs minimisation program (see below)
• Customs value optimisation (see below)
• Classification of goods according to customs tariff categories
• Determination of the most favourable customs procedure for goods import
• Planning to satisfy preferential tariff agreements
• Determining merchandise origin
• Advice on filling out certificates of origin and preference entitlement documentation
• Implementation of simplified (summary) customs procedures
• Avoidance or deferral of customs payments (goods processing for re-export, customs warehouses, temporary imports, goods intended for certain purposes such as installation in aircraft)
• Support and consulting in connection with external audits by customs officials
• Review of assessments
• Customs litigation at both the administrative appeal and court levels
• Restrictions on export of certain goods and services under foreign trade law
• Qualifying for European Union subsidies for trade in agricultural produce
• Support in selecting and implementing software for handling customs transactions
Customs minimisation program
This is our term for an examination of the flow of goods with regard to economic efficiency and compliance with customs law. In a clear majority of cases, the performance of such a check-up brings tangible benefits by detecting errors or inefficiencies in the customs handling, thus permitting the handling process to be rectified or optimised. We devote considerable attention to identification of possibilities for cost reduction. Our findings are presented in the form of a written report, which is then available as an aid for the necessary decision-taking. We assist with implementation of action taken based on our findings.
Customs value optimisation
The assessment of customs duties and other levies on imports is generally based on the value of the goods in question. Depending on the nature and the structure of the particular transaction, certain costs are not counted in arriving at the customs value. This can reduce the customs value and hence the import duties. Customs value declarations must moreover meet the requirements of tax law. The declaration of a customs value under the true value can constitute a criminal offence.
With proper planning, customs duties owing can be reduced by excluding the following cost components from the customs value in whole or in part:
• Warranty costs
• Know-how costs
• Development expense
• Freight and transport costs
The determination of customs value for the importation of software poses certain problems unique to such transactions.
4.3 VAT planning services
Our planning services for VAT and import VAT are as follows:
VAT optimisation program
Our VAT optimisation program has four main components:
• Business process analysis
Business process analysis entails a comprehensive examination of the flow of goods and services with regard to economic efficiency and compliance with VAT laws. In a clear majority of cases, careful business process analysis yields tangible benefits by detecting errors in VAT handling and general business inefficiencies. Working in conjunction with experts from KPMG's business consulting subsidiary, we devote considerable attention to identification of possibilities for cost reduction and improved efficiency in contract controlling, work-flow, and document management. The review extends to all relevant client departments.
• Optimisation and implementation
Our business process analysis findings are presented in the form of a written report, which is then available as an aid for the necessary decision-taking. We assist with implementation of the action taken based on our findings.
• IT selection and controlling
We assist in introducing new IT systems and reviewing existing systems as to their VAT compliance and efficiency. We also assess records keeping, electronic invoicing, and accounting areas with VAT relevance from the point of view of both financial accounting and risk management.
• Education and training
We organise training programs for all of your employees who work in VAT relevant areas (accounting department, sales force, management, etc.).
Input tax credit planning
Businesses are unable to claim an input tax credit on input supplies used to effect tax exempt output supplies. Banks, insurance companies, lessors of real property, and hospitals are among the businesses for which input VAT thus becomes a cost factor. However, such businesses generally effect taxable output supplies as well, making it necessary to divide input VAT into a deductible portion allocable to taxable output supplies and a non-deductible portion allocable to tax exempt output supplies. Proactive tax planning can greatly improve the results of such allocation.
Furthermore, if output supplies are received through a chain of group companies under an insourcing or outsourcing structure, it may be possible to avoid input VAT to a considerable degree by consolidating all group companies into a single unit for VAT purposes. The VAT advantages of consolidation must be weighed against the economic and tax advantages of outsourcing. When the VAT laws of other countries are included in the scope of planning, benefits can often be obtained from asymmetrical structures in which a single supply is classified in different ways by different countries (possible in particular for leasing and factoring).
VAT analysis and planning for specific industries and transactions
Electronic marketing, Internet providers, and software developers are three examples of branches which can profit from intensive VAT planning.
4.4 VAT compliance services
Our compliance services for VAT and import VAT include the following:
Foreign entrepreneurs who supply goods in Germany must register in Germany for VAT purposes. It makes no difference whether the supplies are taxable or tax exempt.
We offer complete VAT return preparation services, including preparation of the monthly or quarterly returns.
Input tax refunds
Non-resident entrepreneurs (businesses) which incur VAT in Germany (for instance, in connection with trade fair exhibits) but make no sales here may in principle have this VAT refunded by filing an application with the Federal Finance Office (see article no. 43). Even non-resident EU entrepreneurs must use this procedure since the European Union has not yet carried through with its plans to permit input tax paid in one member country to be claimed in another member country. Experience shows that non-resident entrepreneurs are frequently unable to cope with the refund process. Often, the sums involved are large and pose significant cash-flow problems. KPMG is equipped to handle refund applications quickly and efficiently. In appropriate cases, KPMG will advise non-resident entrepreneurs to register with the German authorities, file regular VAT returns, and receive refunds from the local tax office instead of the Federal Finance Office.
5. Concluding remarks
Customs duties and indirect taxes apply to the gross value of goods and/or services. The bases on which these taxes are assessed are hence large, even if the tax and tariff rates appear small. Furthermore, the formalism characteristic of indirect taxes and the large number of transactions make analysis difficult and promote inefficiencies. In our experience, the potential savings on customs and indirect taxes are at least as great as on income taxes, if not greater. An investment of greater resources in customs and indirect tax planning is likely to pay off for most firms with cross-border operations.
Disclaimer and Copyright
This article treats the subjects covered in condensed form. It is intended to provide a general guide to the subject matter and should not be relied on as a basis for business decisions. Specialist advice must be sought with respect to your individual circumstances. We in particular insist that the tax law and other sources on which the article is based be consulted in the original, whether or not such sources are named in the article. Please note as well that later versions of this article or other articles on related topics may have since appeared on this database or elsewhere and should also be searched for and consulted. While our articles are carefully reviewed, we can accept no responsibility in the event of any inaccuracy or omission. Please note the date of each article and that subsequent related developments are not necessarily reported on in later articles. Any claims nevertheless raised on the basis of this article are subject to German substantive law and, to the extent permissible thereunder, to the exclusive jurisdiction of the courts in Frankfurt am Main, Germany. This article is the intellectual property of KPMG Deutsche Treuhand-Gesellschaft AG. Distribution to third persons is prohibited without our express written consent in advance.