Companies dealing with a global supply chain crisis and rising inflation have seen their problems exacerbated by the Russia-Ukraine conflict. It has had an impact on global energy markets. Before the war, Europe was already experiencing a gas shortage, which is only getting worse.
To alleviate the cost of living crisis, many governments have reduced indirect taxes, particularly fuel duty and energy VAT. Meanwhile, Coca-Cola, McDonald's, and Starbucks have all pulled out of the Russian market in protest.
The Russian government retaliated with its own sanctions, seizing the intellectual property (IP) of foreign multinational corporations that were leaving the country.
Businesses leaving Russia have had to account for this risk in their transfer pricing (TP) policies, as well as prepare for increased uncertainty in benchmark data. Because of COVID-19, there has been little data certainty, but the war means there will be no return to normalcy for a long time.
Alice Jones, Danish Mehboob, and Leanna Reeves of ITR examine the fiscal implications of Russian sanctions for businesses and the war's economic consequences.
The war continues to take a terrible human toll, with no sign of a peace agreement in sight, while the economic consequences are still being felt around the world.
By fLEXI tEAM