Corporate Risk Management /Multinational Tax Management
Corporate Risk management /Multinational tax management
Corporate risk management AKA managing exchange rate risk. The key issues from this week's lecture are the effects of changes in exchange rates, volatility in the exchange rate markets and how corporations can hedge against this risk. Looking at how to manage 3 types of exposure- transaction exposure, translation exposure and economic exposure.
Multinational tax management looks at how international corporations pay different taxes in different places and therefore the positioning of corporation HQ can have a major impact on how much overall tax is paid. This obviously also affects how a company can MSW.
Corporations often use offshore tax havens to pay lower tax or avoid taxes. Although from an ethical point of view this seems to be wrong , from the point of MSW it is the right thing to do. International companies not breaking the law but exploiting tax loopholes. International corporate taxation is a vastly complex subject (hence why corporate tax lawyers earnings are so high!) but suffice is to say that companies do exploit it and there have been many examples of companies who moved their HQ's to Dublin to take advantage of its very low corporation taxes. Whether they'll stay there now that Ireland is so deep in the mire and whether Ireland increases its Corporation tax level remains to be seen.
From the financial pages this week:
HSBC currently headquartered in London has warned that it is considering moving away if the government keeps criticising the banks for the financial crisis and imposing banking levies over and above those payable in other countries. HSBC (Hong Kong and Shanghai Banking Corporation) only moved its HQ to London on acquiring the Midland Bank in the 90's but if it moves it would be a major blow to the UK treasury. Standard Chartered which has always been HQ'd in London and was the only UK bank to increase profits during the credit crisis due t its success in emerging
Corporate risk management AKA managing exchange rate risk. The key issues from this week's lecture are the effects of changes in exchange rates, volatility in the exchange rate markets and how corporations can hedge against this risk. Looking at how to manage 3 types of exposure- transaction exposure, translation exposure and economic exposure.
Multinational tax management looks at how international corporations pay different taxes in different places and therefore the positioning of corporation HQ can have a major impact on how much overall tax is paid. This obviously also affects how a company can MSW.
Corporations often use offshore tax havens to pay lower tax or avoid taxes. Although from an ethical point of view this seems to be wrong , from the point of MSW it is the right thing to do. International companies not breaking the law but exploiting tax loopholes. International corporate taxation is a vastly complex subject (hence why corporate tax lawyers earnings are so high!) but suffice is to say that companies do exploit it and there have been many examples of companies who moved their HQ's to Dublin to take advantage of its very low corporation taxes. Whether they'll stay there now that Ireland is so deep in the mire and whether Ireland increases its Corporation tax level remains to be seen.
From the financial pages this week:
HSBC currently headquartered in London has warned that it is considering moving away if the government keeps criticising the banks for the financial crisis and imposing banking levies over and above those payable in other countries. HSBC (Hong Kong and Shanghai Banking Corporation) only moved its HQ to London on acquiring the Midland Bank in the 90's but if it moves it would be a major blow to the UK treasury. Standard Chartered which has always been HQ'd in London and was the only UK bank to increase profits during the credit crisis due t its success in emerging