Tax efficient procurement to reduce costs

Businesses are increasingly looking to tax efficiency of their procurement and supply chain footprint as a way of reducing costs.

Tax efficiency is a growing consideration for many business leaders as large multinational companies continue to restructure global operations to take advantage of labour arbitrage. Locations in Singapore and Switzerland are topping many companies list of places to locate global supply chain hubs.

Fast moving US consumer good and technology group businesses were the first to adopt tax efficient supply chain management in large numbers.

"It is no coincidence that these were also the first to become truly globalised. The rest of the world has been catching up over the past decade - centralised supply chains now feature across all sectors and regions," wrote Stuart McDougall, head of tax efficient supply chain management at KPMG in the Financial Times.

McDougall explained that while Singapore and Switzerland, with corporate tax rates of between 5 and 10%, continue to be attractive locations but, despite this, only half of the organisations KMPG advises on will be based around a tax-efficient location. The rest of the organisations, he claimed, "tax savings do not feature".

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