Dealing with Global Tax Compliance

My name is Sergio Vazquez, and I have the privilege to work for Cemex, a global construction materials company with more than US $15 billion in revenues, which is strategically positioned in the Americas, Europe, the Middle East, Asia, and Africa. 

Cemex is a company focused on creating sustainable value by providing industry-leading products and solutions to satisfy the construction needs of our customers around the world. To continue providing industry-leading products and solutions, Cemex has defined the following essential values:

1. Ensuring health and safety

2. Focusing on customers

3. Acting with integrity

4. Working as one CEMEX

5. Fostering innovation

6. Embracing diversity

Cemex takes very seriously its tax compliance in every single country where we operate, always having an open and transparent relationship with the different authorities around the world. As such, and considering the increasing relevance of transfer pricing during the past several years, Cemex decided to establish an in-house global transfer pricing team that reports directly to the global vice-president of Taxes.

I have had the privilege of leading the transfer pricing team for the past 17 years. As a multinational company doing business in more than 50 countries, there are several intercompany transactions from a different range of areas that need to be properly priced, monitored, and documented.  

Since I took the position, I have seen an increase in the importance of transfer pricing compliance around the world. Now, most countries where we do business have transfer pricing regulations included in their local legislation. The local tax authorities are prioritizing transfer pricing audits as they have realized it is more efficient to collect taxes from transfer pricing than from other corporate tax issues. Of course, this is on top of recent developments such as BEPS 1 and 2, the new plans to make public the country-by-country report, and the reduction in time that the taxpayers have to prepare and submit their transfer pricing documentation electronically to different tax authorities.

To navigate these changes in the most efficient way possible as an in-house practitioner, we need to have well-defined policies, proper channels of communication with the different departments in the organization, a clear understanding of the objectives of the company from a short, medium, and long-term perspective, including plans for potential M&A activity, and have the right external advisors that guide us on challenging topics.

Something that I love about Cemex is that it is passionate about technology, and the top management pushes us to innovate and use technology in our day-to-day work. This helps us to be more efficient and better manage all the different compliance activities that we have.

In summary, I believe that as tax practitioners specialized in transfer pricing, there is a lot of work to do to better prepare ourselves for the challenges we are currently having and will have in the near future.   We also have a lot to learn from the new regulations that the different authorities and the OECD are implementing to make the tax function more transparent.