Supply Chain Optimisation Practice

Multinational companies (MNCs), engaged in global trade, are facing an environment with growing complexity.  Emerging trade protectionism has led to unprecedented policy instability. Even worse, the global spread of COVID-19 has also created obstacles to the flow of goods and personnel. These difficulties will also have a profound impact on future global supply chain set-ups.

On the other hand, quite a few countries have shifted their focus to establish bilateral and multilateral trade policies. These measures aim to make the flow of goods, services, personnel, capital and information easier among multiple economies or within a certain region, and utilize each area’s comparative advantages to facilitate trade regionalisation.  This raises a question for MNCs of how to take advantage of preferential trade policies and improve the efficiency of their current supply chain models? Without addressing these questions, MNCs are likely to face higher operating costs, tax burdens and trade barriers.

Meanwhile, new business models that rely on intelligent technology and digitalised tools are also emerging and evolving. Companies can only survive and prosper if they improve their supply chain network and enhance operational risk controls.

The KPMG China team has rich experience in supply chain optimisation, customs planning and R&D tax incentives application. With our in-depth understanding of different industries and successful implementation of several restructuring models, we have formed a solid collaboration network, both locally and globally, to assist companies improve their supply chain structure, lower their production and tax costs, and enhance overall operations and management efficiency.

Supply chain structure and operation model optimisation

• Organise and improve the distribution and arrangement of key supply chain functions, assets and personnel; propose feasible related party transaction models and pricing policies to realize a reasonable profit distribution and tax planning within the group.
• Based on the supply chain structure and commercial needs, optimise procurement and distribution models, and utilize current trade preferential measures and FTAs to lower import tax exposures.
• Investigate and analyse preferential tax policies, fiscal incentives and other applicable policies in special regions within or outside China in order to fully enjoy relevant policies and increase profits.
• Draw on experiences from other industries, as well as on the planning of warehousing and distribution networks, to perform data analysis on raw material procurement, human resources, transportation, customs duty and other costs, effectively reducing the total “landed” costs.
• Assist companies with the implementation of supply chain restructuring, respond to operational hurdles, and prepare supporting documentation for tax and customs purposes.

Import and export duty arrangement and optimisation

• Study Bills of Material and look for areas where optimisation can be achieved to shift the substantial transformation and change the Country of Origin.
• Analyse product composition, structure or characteristics and suggest alternative designs to mitigate increased duties.
• Assist with HS code and Country of Origin ruling applications.
• Utilize special service providers in different bonded zones, lowering import taxes.
• Study the feasibility of US First Sale Implementation and assist in establishing qualified transaction structures and paper trails to reduce import duty in the U.S.

R&D and tax/fiscal incentives planning and application

• Planning on R&D tax incentives and R&D related supply chain structure
• R&D tax incentives scheme design and advisory
• Material preparation for R&D tax incentives application
• R&D management system improvement
• Feasibility study, status improvement and planning on government special subsidies
• Green taxes incentives analysis
• Green taxes management improvement
• Audit defense assistant
• Intellectual property planning and application