Tax strategy in a shifting global trade environment

As tech businesses scale internationally, few elements shape their growth prospects as significantly (or as quietly) as tax. Whether structuring IP ownership, navigating export controls or managing cross-border transactions, tax strategy is a key enabler of sustainable global expansion. Yet, in a world increasingly defined by geopolitical friction, digital regulation, and economic security, international tax planning is also becoming a source of risk exposure.

Transfer pricing and tax risk

From our position as advisers to high-growth tech groups, we see increasing pressure on transfer pricing policies as global trade dynamics shift. Authorities in key jurisdictions, including the US, India, and much of Europe, are taking a more assertive stance on how value is created and shared within international groups.

For tech companies with centralised IP and R&D functions, this means regularly reassessing whether intercompany recharges and value chains remain defensible in light of changing guidance and enforcement trends. Effective transfer pricing is no longer just about documentation, it's about embedding commercial alignment, substance and adaptability into the group’s operating model.

Pillar Two and recent G7 developments

Pillar Two, the OECD’s global minimum tax regime, continues to reshape how international expansion is planned. The large UK-headquartered tech groups within scope that have traditionally routed operations through low-tax jurisdictions now face leakage unless they adapt structures to meet minimum effective tax thresholds.

Encouragingly, the recent G7 agreement in June 2025 has brought greater stability to the landscape. The UK and its partners reached a common understanding on how Pillar Two can operate alongside the US minimum tax system, and crucially, helped secure the removal of a potentially damaging retaliatory tax measure (Section 899) from US legislation.

However, the underlying challenge remains as to how UK groups can remain globally competitive while aligning with international substance and transparency requirements. Leveraging domestic tax incentives such as R&D and the Patent Box will remain vital, but these must be integrated into a broader, compliant international strategy.

Supply chains and tax technology

Supply chains also have a growing tax dimension. More companies are investing in tools that improve transparency and traceability. But few realise that the same data could streamline customs duty and VAT compliance and even support ESG-linked tax reporting in due course. Getting tax and tech teams talking is an underrated competitive advantage.

National security and IP structuring

Export controls and national security rules are playing a growing role in how tech companies structure their international operations, which increasingly overlaps with tax planning.

For example, licensing technology or software across borders may be subject to export restrictions or sanctions. If IP is held in, or licensed to or from, a jurisdiction subject to national security concerns, it can trigger unexpected withholding tax, reporting obligations, or even restrictions on receiving payments.

Businesses need to ensure that tax and legal teams work together when structuring international IP ownership or intercompany licensing, to avoid not just tax leakage, but regulatory exposure as well.

Tax as a strategic driver - future-proof tax planning

In this environment, tax should no longer be viewed as a back-office compliance cost, but as a strategic lever that needs to be aligned with commercial, operational and legal decisions from the outset.

Looking ahead, as bilateral and digital trade agreements evolve, and as new tax transparency requirements emerge globally, the most resilient tech businesses will be those who invest early in joined-up strategies, where tax planning is embedded in the business model, not just bolted on after the fact.

At Moore Kingston Smith, we work with tech companies at every stage of growth, helping them future-proof global tax strategies and build the resilience needed to thrive in a disrupted world.

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