Transformative forces are urging consumer and retail businesses to adopt new strategies
Amidst the disruption of an evolving marketplace, consumer and retail businesses are forced to revisit their e-commerce strategies, and more broadly their business models, to keep consumers engaged and improve their experience — while controlling pricing and maintaining margins.
Critical tax implications
The emergence of new categories of assets and business processes critical for the success of e-commerce and D2C strategies creates several tax considerations:
- Are new intangible assets being developed?
- Are these assets relying on different development, enhancement, maintenance, protection, and exploitation (DEMPE) functions?
- Is the value of legacy intangible assets (brands, customer and marketing intangibles, technology) being enhanced because of e-commerce initiatives?
- Are new high value functions being performed (for example, digital marketing, advance data management and analytics, supply chain and e-commerce inventory management)?
- Ultimately, do all the above constitute new value drivers that increase existing revenue, generate new revenue streams, or create cost efficiencies?
Looking ahead today
All consumer and retail companies investing in e-commerce should revisit their operating models and structures to help ensure they are properly addressing the relevant tax implications and potentially unlocking tax value.