Tax by Industry: Process and Industrial Products
Process and industrial products (P&IP) manufacturers today balance complex demands: the drive for product innovation, cost management and cash flow pressures, and higher energy costs — to name a few. Meanwhile U.S.-based companies must compete with those in flat-tax and tax-incented jurisdictions. A hitch from the tax side can throw business off — or stop it altogether.
By understanding the nuances around international tax issues, exposure, compliance and strategic planning, P&IP manufacturers can manage tax risks — and realize competitive advantage. Effective tax rate management, such as preventing income from being realized unnecessarily in high-tax jurisdictions, can generate permanent cash tax savings for redirection into research, facilities, marketing and more. Another area of opportunity: tax-aligned supply chain management.
A strategic approach to cost accounting, inventory methods and specialized capitalization tax rules can lead to significant cash-flow timing benefits, and a review of global research and development tax credits can increase the return on investment on innovation. As the U.S. government continues to stimulate the market for energy efficiency, sustainability incentives and "green" legislation also will have many ramifications for manufacturers.
Like manufacturing, tax management involves the calibration of many moving parts. Are savings opportunities slipping through? Are foreign locations leaving you exposed? Our team of tax specialists, including engineers and other P&IP industry veterans, can help.