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Tax Aligned Global Supply Chains: Environmental Impact Illustrations, Legal Reflections and Crossfunctional Flow Charts

Henkow, Oskar LU and Norrman, Andreas LU (2011) In International Journal of Physical Distribution & Logistics Management 41(9). p.878-895
Abstract
Both logisticians and tax lawyers design global supply chains – but based on different logics. If they do not align each other’s perspectives, problems might occur in different areas. The purposes of this paper are to

1) illustrate the impact the tax system could have on supply chain design,

2) reflect (from both perspectives) on how the rules function.

3) propose a common communication platform for supply chain issues and tax issues.



Design / methodology / approach

This interdisciplinary research is based on a systems approach, combining logistics system descriptions (based on interviews, workshops and company data) with legal analysis. Main principles of the tax system were applied... (More)
Both logisticians and tax lawyers design global supply chains – but based on different logics. If they do not align each other’s perspectives, problems might occur in different areas. The purposes of this paper are to

1) illustrate the impact the tax system could have on supply chain design,

2) reflect (from both perspectives) on how the rules function.

3) propose a common communication platform for supply chain issues and tax issues.



Design / methodology / approach

This interdisciplinary research is based on a systems approach, combining logistics system descriptions (based on interviews, workshops and company data) with legal analysis. Main principles of the tax system were applied to the system descriptions (the principle approach).



Findings

Logistics and tax systems interact. Issues of implementing drop shipment in different global contexts are shown. One issue is cross-border rerouting leading to unnecessary environmental impact. Hence interaction between the domains should be improved before starting to optimize global logistics or tax structures. A combined platform for mapping flow charts jointly is proposed.



Practical implications:

Practitioners from both domains acquire increased understanding of each other’s perspectives and a joint tool for flow mapping combining facts both sides need in their overall analysis. Logisticians will gain better insight into general fiscal principles.



Societal implications:

Societal inefficiencies due to extra cross-border transports instead of drop shipments were the result when the fiscal rules were applied in reality in certain contexts. This was probably not desired from the policy makers’ perspective, so it might lead to policy makers to better try to understand the combined impact of the domains.



What is original/value of paper: The combination of the legal and logistics approach. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Supply Chain Design, Tax Aligned Supply Chains, Indirect tax, VAT, legal, fiscal, CIT, case
in
International Journal of Physical Distribution & Logistics Management
volume
41
issue
9
pages
878 - 895
publisher
Emerald Group Publishing Limited
external identifiers
  • wos:000299455700005
  • scopus:80053623238
ISSN
0960-0035
DOI
10.1108/09600031111175834
language
English
LU publication?
yes
id
87e5f36c-2fcb-41cd-a8e8-1771526d9e81 (old id 1887833)
date added to LUP
2011-04-05 11:46:33
date last changed
2017-08-06 04:03:36
@article{87e5f36c-2fcb-41cd-a8e8-1771526d9e81,
  abstract     = {Both logisticians and tax lawyers design global supply chains – but based on different logics. If they do not align each other’s perspectives, problems might occur in different areas. The purposes of this paper are to<br/><br>
1) illustrate the impact the tax system could have on supply chain design, <br/><br>
2) reflect (from both perspectives) on how the rules function.<br/><br>
3) propose a common communication platform for supply chain issues and tax issues.<br/><br>
<br/><br>
Design / methodology / approach<br/><br>
This interdisciplinary research is based on a systems approach, combining logistics system descriptions (based on interviews, workshops and company data) with legal analysis. Main principles of the tax system were applied to the system descriptions (the principle approach). <br/><br>
<br/><br>
Findings<br/><br>
Logistics and tax systems interact. Issues of implementing drop shipment in different global contexts are shown. One issue is cross-border rerouting leading to unnecessary environmental impact. Hence interaction between the domains should be improved before starting to optimize global logistics or tax structures. A combined platform for mapping flow charts jointly is proposed.<br/><br>
<br/><br>
Practical implications: <br/><br>
Practitioners from both domains acquire increased understanding of each other’s perspectives and a joint tool for flow mapping combining facts both sides need in their overall analysis. Logisticians will gain better insight into general fiscal principles.<br/><br>
<br/><br>
Societal implications: <br/><br>
Societal inefficiencies due to extra cross-border transports instead of drop shipments were the result when the fiscal rules were applied in reality in certain contexts. This was probably not desired from the policy makers’ perspective, so it might lead to policy makers to better try to understand the combined impact of the domains. <br/><br>
<br/><br>
What is original/value of paper: The combination of the legal and logistics approach.},
  author       = {Henkow, Oskar and Norrman, Andreas},
  issn         = {0960-0035},
  keyword      = {Supply Chain Design,Tax Aligned Supply Chains,Indirect tax,VAT,legal,fiscal,CIT,case},
  language     = {eng},
  number       = {9},
  pages        = {878--895},
  publisher    = {Emerald Group Publishing Limited},
  series       = {International Journal of Physical Distribution & Logistics Management},
  title        = {Tax Aligned Global Supply Chains: Environmental Impact Illustrations, Legal Reflections and Crossfunctional Flow Charts},
  url          = {http://dx.doi.org/10.1108/09600031111175834},
  volume       = {41},
  year         = {2011},
}