A global analysis for companies seeking competitiveness, security and fiscal sustainability
In recent years, Latin America has intensified the debate on how to structure tax policies that promote business activity. The Inter-American Development Bank (IDB) states it clearly: the region needs fiscal frameworks that promote investment, productivity and formality.
This reflection connects with a universal message that is also shared by the main European think tanks, multilateral organizations and international consulting firms:
the company is the core that sustains any economy.
It creates jobs, generates innovation, boosts consumption and feeds the public coffers through direct and indirect taxes.
From a strategic and tax consulting perspective, this analysis is essential to understand how tax systems should evolve to ensure sustainability and competitiveness. At Advixy, we observe these trends from a global perspective, because they directly affect the operations and growth of companies that move between different markets.
1. Latin America: a continent seeking air for its companies
According to the IDB, Latin American companies operate in environments where the effective tax burden depends not only on taxes, but also on:
- regulatory complexity,
- manual procedures,
- high administrative costs,
- regulatory uncertainty,
- fragmented tax structures.
All this reduces investment capacity and limits business expansion.
The countries of the region are beginning to design policies that:
- simplify obligations,
- reduce compliance burdens,
- incentives for formalization,
- attract foreign direct investment
- and modernize tax administrations.
An objective that every strategic consulting firm recognizes as crucial: an economy cannot grow if its companies do not breathe.
2. The European Union: a model based on stability, digitalization and incentives.
Europe works in a coordinated manner to provide a predictable, digital and competitive tax environment. Although the tax burden may seem higher than in Latin America, the EU compensates with:
- legal certainty,
- harmonized standards,
- incentives for innovation and R&D,
- special tax regimes (such as the Canary Islands Special Zone),
- advanced infrastructures,
- access to public financing.
The EU is committed to a framework where the company has clear, consistent and transparent rules. At Advixy, we see this approach as a fundamental element for any business seeking long-term stability.
3. A common point: tax digitalization
In both Latin America and Europe, digitization has become the key tool for the development of new products and services:
- reduce tax fraud,
- lowering compliance costs,
- streamline processes,
- improve traceability,
- facilitate internationalization.
Electronic invoicing in Latin America was pioneered.
Europe is now moving forward with Verifactu, ViDA and integrated electronic systems.
In Advixy we accompany companies in this transition, because digitization is no longer an added value, but a competitive requirement.
4. Global agreement: tax systems must boost, not hold back
PwC, KPMG, EY and other international firms agree on a conclusion that we at Advixy fully share:
modern tax policy should be a catalyst for business growth.
It is not just a matter of collecting more, but of collecting better.
A system that penalizes investment reduces the tax base, drives companies out of business and deteriorates employment.
A system that encourages activity consolidates tax collection and strengthens the State.
Balance is the key.
5. What can both worlds learn from each other?
What Latin America can take from Europe:
- regulatory stability,
- well-structured incentives,
- tax innovation frameworks,
- unified digitalization,
- cross-cutting legal security.
What Europe can learn from Latin America:
- agility in technological implementation,
- practical simplification,
- ability to adapt in volatile environments.
6. Conclusion: building tax systems that allow businesses to grow
The future belongs to those countries -and companies- that understand that taxation and competitiveness are not conflicting concepts, but complementary.
A smart tax framework:
- protects public revenues,
- encourages investment,
- drives innovation,
- strengthens the business fabric
- and sustains economic stability.
At Advixy, as a strategic business consultancy, we analyze these global models because they directly affect our clients’ investment, expansion, digitalization and tax compliance decisions.
Understanding how the tax world is evolving is essential to anticipate, adapt and grow.
The challenge is no small one, but neither is the opportunity.
In Advixy we understand that tax decisions are strategic decisions. We accompany national and international companies in processes of tax planning, expansion, digitalization and regulatory compliance, always from a global and anticipated vision of economic changes.
