Tax Help Wanted … in Restructuring Supply Chains

Chief Tax Officer Michael Bernard weighs in on the tax implications of KPMG’s new study on changing global supply chains.

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It’s a brave new world for tax leaders, especially those in companies whose supply chains have been disrupted by trade disputes, a global pandemic and the onset of a potentially lengthy recession.

Supply Chain Restructuring

KPMG examines the far-reaching implications of “Supply Chain’s New World Order” in a white paper that emphasizes the increasingly strategic role tax functions will need to assume as efforts to restructure supply chains gain momentum.

The paper’s underlying argument is that the “supply chain model of the future will deemphasize efficiency and lowest-cost as the dominant definer of value, in favor of a multidimensional value framework.” While cost will, of course, remain a crucial consideration, the paper’s authors assert that future supply chain decision-making will assign greater value to risk exposure, supply alternatives, channel complexity and—you guessed it—tax considerations.

Tax Considerations for Supply Chains

If tariffs, export controls and trade sanctions increase in the coming months, as KPMG projects, tax considerations will become even more important factors that determine how supply chains are designed and/or redesigned. Not only will tax considerations elevate in importance, they will also become more nuanced, according to the paper’s three authors.

“The global pandemic will add to the forces already eroding global free trade norms,” notes KPMG Value Chain Management Leader and International Tax Partner Brett Weaver. “In its wake, tax and trade will play a greater role in future supply chain design. This will necessitate a new level of collaboration between operations teams and the tax function.”

The paper’s authors also note that news coverage of the pandemic has helped drive the term “supply chain” into mainstream awareness, and the same shift may soon occur with the term “tax optimization.”

Blog Author

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

Vice President of Tax Content and Chief Tax Officer

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being Senior Director – Tax Counsel. Michael led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. Michael has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. Michael also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.

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