WorldCom Enterprises

Introduction:

WorldCom Enterprises is a global conglomerate with subsidiaries in over 15 countries. While the company had grown rapidly and diversified its business, they were struggling with managing their international tax obligations. With operations in multiple tax jurisdictions, WorldCom was facing high tax liabilities and needed help optimizing their global tax strategy.

Client Background:

Founded in 2000, WorldCom Enterprises has become a significant player in the tech and telecommunications sectors. The company has expanded its operations internationally through a combination of organic growth and acquisitions. As they grew, WorldCom found themselves paying substantial taxes in multiple countries, often due to inefficient tax structures that didn’t take full advantage of available deductions and credits.

Challenge:

WorldCom Enterprises was facing high international tax liabilities due to a lack of coordination between their global subsidiaries. The company’s tax strategy had been reactive rather than proactive, leading to inefficiencies and missed opportunities for tax savings. They were paying high taxes in some jurisdictions, while in others, they weren’t fully utilizing tax credits or deductions available to multinational companies.

Additionally, there were issues with transfer pricing between subsidiaries that increased their tax burden. WorldCom needed expert help to streamline their international tax strategy and reduce the risk of double taxation and penalties.

Solution:

KSFG conducted a thorough analysis of WorldCom’s international operations, reviewing their existing tax structure, intercompany transactions, and transfer pricing policies. We recommended several changes, including the restructuring of certain cross-border transactions and the implementation of a more effective transfer pricing strategy.

We also assisted the company in applying for tax credits available under international treaties and took advantage of tax incentives for R&D activities in certain jurisdictions. Our team worked with WorldCom’s in-house tax department to ensure that they were fully compliant with local tax laws while reducing their overall tax burden.

Outcome:

With KSFG’s help, WorldCom Enterprises was able to save $150,000 annually in international tax liabilities. By optimizing their tax structure and implementing more efficient transfer pricing, they reduced their exposure to double taxation and minimized the risks of audits and penalties. The company now has a clearer understanding of their global tax obligations and has a tax strategy that allows them to focus on growth while minimizing tax costs.

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