Global Restructuring: Reflections on Goodwill and Taxes

International restructuring is frequently a necessary element in global tax planning. Restructuring based on “arm’s length” principles often involves transferring and paying for goodwill. Goodwill may be hard to identify and ephemeral, and presents difficult problem for accountants and tax authorities alike. This paper analyses a case of restructuring of a multinational corporation involving huge amounts of goodwill (approximately one billion USD), most of which subsequently disappeared. The company has been accused of tax as well as accounting fraud. Tax reporting and accounting are related because both represent the same set of facts. This paper provides a detailed analysis of the facts of the case without providing definite conclusions.