Complex tax regimes mean that companies must seek the right strategic advice to ensure the success of corporate transactions in a global business world.

Companies need to know the main factors in their structure that can open up opportunities for tax efficiencies and how these can be used to best advantage. This applies to all businesses, whether multinational companies, partnerships, joint ventures or entrepreneurs setting up new businesses.

While European tax harmonisation is not currently on the agenda, it has not gone away. Tax and accounting regimes constantly change and inevitably get more complicated. Tax is also increasingly being seen as a way of making a country more attractive to foreign investors. Ireland is the great example of this approach. Corporate tax rates are the lowest, 12.5%, in any of the Economic Co-operation and Development (OECD) countries – with the result that, per head, Ireland receives more foreign investment than nearly all the other 29 OECD countries.

Eastern European countries were heavily influenced by the Irish example when they just about set up their tax systems from scratch after the fall of the Berlin Wall in 1989. Hungary, for instance, has a 16% corporation tax rate. National debate on corporation tax rates – which used to be a domestic issue about whether or not it was fair – is now much more about whether it will be seen as attractive abroad. The UK is just dropping rates (from 30% to 28%) and Italy, for instance, is consumed by discussion about whether it can.

Comparative tax rates have always been crucial issues for multinationals – especially in sectors such as pharmaceuticals, where the production process is carried out in different states.  The same is now becoming true for smaller pioneering businesses which operate across national boundaries.

Tax systems in different states are more similar than a non-expert might expect. Most developed countries use the same basic tax tools – a goods tax (VAT – typically accounting for 30% of tax take in OECD countries), corporation tax, excise duties, personal taxes, property tax and – increasingly – environmental taxes. In the OECD countries, Mexico had the lowest personal tax rates (including contributions to the social security system) in 2006 – with a rate of 5% for those on the national average salary, compared with Germany (42.7%) and Denmark (40.9%), which had the highest. The UK at 26.8% was in the middle.