Value Chain Analysis (VCA)

Value Chain Analysis (VCA)
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Industries
Value Chain Analysis (VCA)
August 31st, 2016
The value chain for any firm links value-creating processes and activities. It refers to the entire performance process of a company, which begins with the research and development and ends with the delivery to the end consumer.

The value chain for any firm links value-creating processes and activities. It refers to the entire performance process of a company, which begins with the research and development and ends with the delivery to the end consumer. While a function and risk analysis is geared to individual group companies, a value chain analysis applies on cross-company processes within the Group.

Companies always have and will continue to view the world and their competitive environment in a unique manner, have their own mission, vision, ambition and corporate objectives and define their own unique competitive advantages.

Due to this, there is no objective method to conduct a value chain analysis. Hence, the basic approach to be followed for any value chain analysis should start with identifying the industry-wide value chain and mapping the value linkages of the MNE within the industry. A value contribution analysis should contain evidence as to what prices, cost premiums, margins, etc. are, in light of the economic contributions the individual companies, considered reasonable.

In simplest terms, mapping the industry value chain requires identifying and separating the value creating activities of an MNE.

Is there a burning requirement for Value Chain Analysis?
YES!

This is because of the following key reasons:

  • BEPS = Full tax transparency;
  • BEPS = a merger of residence of “taxable income” with the residence of “people functions” responsible for generating it;
  • BEPS feeds “greed at the level of tax authorities”, i.e. the wide and/or different interpretations by different countries’ tax authorities of the BEPS/TP guidance can trigger even more than double taxation on the same profits;
  • BEPS has already triggered some tax authorities to:
    • Open the hunting season for aggressive tax structuring(s). For example, the Australian Tax Office; and
    • Request a full value chain disclosure in TP local country files and CbC reporting. For example, the Chinese Tax Authorities.

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Example


Webinars

View Recording How through a proper Value Chain Analysis the tax payer takes in control of the new generation of TP documentation requirements (BEPS Action 13).
View Recording Should Apple Pay $13 billion Penalty to EU?: BEPS and Transfer Pricing in MNCs
View Recording Why is Value Chain Analysis critical in a BEPS environment?
View Recording How to fight State Aid cases through a full "value chain analysis" - the Starbucks and Apple cases?
View Recording How Value Chain Analysis can contribute to managing controversy effectively.
Pending... Substance after BEPS; Value Chain Analysis required.
Wed, Dec 14, 2016 4:00 PM - 5:00 PM CEST
 
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Core Team

Steef Huibregtse
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Raymund Gerardu
T: +31 20 894 2557
E: r.gerardu@tpa-global.com


 

If you are searching for a way to gain an edge on your competition, consider one of the business world's most valuable tools: the value chain analysis. 

Value chain analysis relies on the basic economic principle of advantage — companies are best served by operating in sectors where they have a relative productive advantage compared to their competitors. Simultaneously, companies should ask themselves where they can deliver the best value to their customers. 

To conduct a value chain analysis, the company begins by identifying each part of its production process and identifying where steps can be eliminated or improvements can be made. These improvements can result in either cost savings or improved productive capacity. The end result is that customers derive the most benefit from the product for the cheapest cost, which improves the company's bottom line in the long run.

- See more at: http://www.businessnewsdaily.com/5678-value-chain-analysis.html#sthash.6LedMcni.dpuf

If you are searching for a way to gain an edge on your competition, consider one of the business world's most valuable tools: the value chain analysis. 

Value chain analysis relies on the basic economic principle of advantage — companies are best served by operating in sectors where they have a relative productive advantage compared to their competitors. Simultaneously, companies should ask themselves where they can deliver the best value to their customers. 

To conduct a value chain analysis, the company begins by identifying each part of its production process and identifying where steps can be eliminated or improvements can be made. These improvements can result in either cost savings or improved productive capacity. The end result is that customers derive the most benefit from the product for the cheapest cost, which improves the company's bottom line in the long run.

- See more at: http://www.businessnewsdaily.com/5678-value-chain-analysis.html#sthash.6LedMcni.dpuf
Value Chain Analysis (VCA)
; posted on
August 31st, 2016
The value chain for any firm links value-creating processes and activities. It refers to the entire performance process of a company, which begins with the research and development and ends with the delivery to the end consumer.
TPA BEPS Desk

Transfer Pricing Associates introduces TPA BEPS Desk. If you have any questions, or need more detailed advice on any aspects of BEPS related issues, please get in touch with us. The TPA Global network has alliance partners throughout the world, and the network can provide multi-disciplinary approach on today's critical transfer pricing challenges faced by multinational enterprises.

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