A global tax strategy for a high growth online retailer

A consumer products company – marketing solely through social media – experiences a rapid sales growth rate of a hundred times revenue within a month! 90% of the company’s customers are located in the US and international markets, with all manufacturing and sales handled in the US, and marketing headquartered in Canada. The company was concerned about their US and Canadian tax compliance and the potential exposure to global tax rates of over 40%. The owners desired the ability to be in a tax efficient position should they wish to sell their company.

Strategy. We advised our client to structure their operations and business in a tax efficient manner.

Valuation. We provided a valuation to support the current value of the business, which was critical to the owners.

Global Insight. We leveraged our global connections through Nexia International to assist with overseas VAT and related tax issues. We also worked with transfer pricing experts to ensure that the client was compliant with international tax requirements.

Operations. We assisted in the organization of international subsidiaries, and implemented a reorganization of the various entities – as a means of optimizing tax outcomes at the various taxation levels – resulting in the creation of a structure that minimized overall world-wide taxation.

We were able to significantly reduce our client’s global tax rate. The owners retained Canadian residency for tax purposes and reduced their overall tax burden by avoiding significant US and global tax exposure. The owners were provided with a tax road map designed to avoid Canadian, US and global tax traps and maintain compliance on a go-forward basis.

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