Philip Rogers is Tax Partner with DLA Piper LLP in New York, New York where he specializes in international tax law. Philip Rogers represents numerous Fortune 500 companies on international tax matters and advises clients on a broad range of cross-border tax and business issues. His international tax expertise includes international restructuring, post-merger and post-acquisition integration, repatriation planning, global supply chain planning and intellectual property migration. Prior to joining DLA Piper LLP in the New York, New York office, he was Tax Partner with Ernst & Young’s international tax group for more than fourteen years. However, Philip Rogers was with this practice for more than eighteen years.
Philip Rogers earned his LL.M degree from New York University, New York, New York in 1990; he earned his J.D. from Hofstra University, School of Law, Hempstead, New York in 1983; he also earned his M.B.A. from Hofstra University in Hempstead, New York in 1983; and he earned his B.A. from State University of New York at Albany in 1979.
KJ- Looking back, what was the greatest benefit of your eighteen years experience with the Ernst and Young international tax group?
PR- I learned the importance of collegiality and team building in an organization. The emphasis on team building enabled our team to select the right professionals in our organization to match each client’s needs. It is important to have a team approach in order to best serve clients’ overall needs.
KJ- After eighteen years in the national office of a Big Four firm you elected to move to DLA Piper LLP. What was your motivation to move to DLA Piper LLP in New York?
PR- Over the years, I have built respected relationships as a trusted Advisor to my clients and their organizations. The opportunity to come to DLA Piper LLP and support the firm’s rapidly growing international tax practice was very attractive to me. In fact, we have been able to do the same type of team building here; and as part of the team at DLA Piper LLP we have been the first international law firm to have foreign desks of foreign lawyers and tax practitioners housed in one location. Our goal as a global team of tax lawyers is to have the ability to service any client in any country around the world regarding their tax issues. We are fortunate that we have an incredible group of very talented tax lawyers at DLA Piper LLP.
KJ- Yes, I know that DLA Piper LLP has a team of very talented tax lawyers! In fact, it is well known you are highly regarded among your peers and your clients around the world.
PR- Thank you. What I really enjoy about the opportunity to work at DLA Piper LLP is the direct contact with clients. Clients are looking for a trusted Advisor that they can have a relationship with and who will be available to them 365 days a year. Clients want and expect good service from you and when they know they will get this type of service, they want more service from you. I enjoy DLA Piper because it has a much leaner model over a public accounting firm and this ensures that the client is working directly with me on these projects. In this firm, you are the person responsible to be in the trenches actually doing the work for the client. Our Tax Partners worldwide approach our clients from a team perspective and this teamwork approach is essential to success both in terms of what our firm offers and in terms of what our clients need. As a global law firm, we also have the resources to service our clients in most areas outside of tax~ we offer a panoply of services to our clients. What is also critical to our success is our responsiveness in servicing our clients and developing trust with them so they know you are there for them for the long term. For example, we need to be responsive, especially during these times, when clients may ask you to work with them on fees and we are sensitive to these needs as they go through this time. We want to demonstrate to clients that we are there for them first and foremost!
KJ- What tax issues are your clients faced with in this market?
PR-There is currently a significant emphasis on access to liquidity and mobilizing cash. What I mean is that companies have cash in their systems and they are still making money but there is a real concern of management and treasury. Companies want to able to manage cash more effectively even if the cash is offshore. These companies are looking for ways to access their cash, how to mobilize it, and how to move it from one or two countries instead of twenty-five countries and how to move it back into the United States or any other country if this is what they choose to do. We call this cash re-deployment or repatriation but it is now coming up in the context of liquidity and mobilizing cash.
KJ- What kind of advice are you giving clients?
PR- I would tell them that there are opportunities to bring back cash or redeploy cash both in the short term and the long term. What one really has to do is understand the company’s facts and work hard to come up with a company strategy that involves, not only tax but treasury, the CFO, the CEO, etc. in order to determine what the company needs are and how to get the cash in the most efficient way possible. I believe this needs to be done in a multi-disciplinary approach within the company with the Advisor helping the company navigate from Point A to Point B. You will need to create a menu of opportunities and rank and prioritize them according to the company needs.The second area that I am seeing a significant amount of activity is streamlining. Streamlining is when a company has a number of entities that may be redundant or have limited activity. From an internal cost point of view, when you add in accounting costs and systems costs, a company may spend anywhere from twenty-five thousand dollars to fifty thousand dollars per entity on an annual basis to keep the entity alive. I would advise the company to eliminate unnecessary entities and rationalize the company structure; they should make it a cleaner and more simplified structure.
KJ- What appears to be the major focus in this market?
PR- Again, there is a lot of focus on repatriation and the legislative solutions that go with it. We had a similar issue in 2005 where we had a one time relief and companies were allowed to bring back money that was offshore at a very favorable rate. I believe companies are looking for a second version of the Jobs Creation Act, Section 965 of the IRS Code and there is a provision out there that talks about sunset. Due to sunset, it is called the CFC Look-Through Rule. What this basically means is that at that time, if you have sister companies or subsidiaries offshore, payments between them will not be taxed in the US. This provision is supposed to go away at the end of this year even though it was originally scheduled to go away at the end of last year. There might be a lot of activity around planning in light of the sunset. However, I think there will be some pressure as the year end draws closer that they may try to get a longer shelf life on this particular provision but we shall see.We are also noticing a lot of work on post acquisition integrations and rationalizations, meaning that companies that are contemplating acquisitions or mergers or have already done so, have a need to rationalize their operations because Company A had operations in France and Company B had operations in France and now they have two entities in France. It makes sense from a business point of view to bring the operations together but you must understand the most tax efficient way to do this. I would also recommend supply chain planning as well which is similar; this allows you to align your tax structure with your business model.
KJ- Phil, we genuinely appreciate the time you gave to share your valuable insight and perspective with our readers this month!
Kathleen Jennings (KJ)
Editor, The Tax Intelligence Report
Philip Rogers (PR)
DLA Piper – New York, NY