Background and Challenge
CARBOFIX is an Israeli medical device company with operations and revenue streams spanning multiple countries. For businesses in this position, tax complexity is not an edge case — it is a central operational risk.
Medical device companies face a particularly demanding regulatory environment: strict product approval requirements, healthcare-specific tax treatment in different jurisdictions, and a compliance standard that regulators hold to a higher bar than general industry.
In this context, the tax challenges facing CARBOFIX were both structural and operational:
- Multi-country revenue recognition: Revenue earned across different jurisdictions requires separate analysis of where income is taxable — misclassification creates misreporting risk
- Transfer pricing exposure: Transactions between related entities across borders require arm’s-length pricing documentation to withstand audit scrutiny
- Missed deductions: Without a structured tax review, companies operating across jurisdictions frequently miss legitimate deduction opportunities
- Ongoing compliance gaps: With no centralized compliance process, filings across jurisdictions can fall out of sync — creating late-filing penalties and audit triggers
- Leadership visibility: Management had limited visibility over the company’s actual tax exposure, making financial planning difficult
For a medical device company focused on growth across markets, this level of tax risk and opacity was unsustainable.
How Kerui Helped
Kerui took on CARBOFIX’s full tax accounting function and designed a structured tax strategy tailored to their cross-border operating reality.
Comprehensive Tax Position Review
- Conducted a full review of CARBOFIX’s existing tax positions across relevant jurisdictions
- Identified filings, obligations, and potential exposure points that required correction or clarification
- Mapped revenue flows and entity structures to establish a clear picture of where income was taxable and where compliance was at risk
Structured Tax Strategy Design
- Developed a structured tax strategy specific to CARBOFIX’s cross-border operations and medical device industry profile
- Identified legitimate tax planning opportunities — deductions, timing strategies, and structure optimizations — that had been previously missed
- Advised on transfer pricing documentation requirements for inter-company transactions
- Modeled forward tax liabilities to give management a more accurate picture of expected tax obligations
Ongoing Compliance Process Establishment
- Built recurring compliance workflows covering all relevant jurisdictions
- Ensured filing deadlines, documentation standards, and reporting obligations were consistently met
- Provided regular reporting to management on current tax status, upcoming obligations, and any risks identified
Outcome
CARBOFIX now has clear visibility over its tax exposure — and a structured tax strategy that supports business planning across jurisdictions.
- Management has a clear picture of the company’s tax position across jurisdictions — no more hidden exposure or opaque compliance status
- A structured tax strategy is in place that identifies planning opportunities while maintaining full regulatory compliance
- Ongoing compliance processes ensure all jurisdictions are covered, filing deadlines are met, and documentation standards are consistently maintained
- Leadership can make business and investment decisions with a more reliable understanding of tax implications
