Vistaprint 2015 Annual Report Download - page 32

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United States have imposed or are seeking to impose indirect taxes on Internet sales. A successful assertion by
one or more governments in jurisdictions where we are not currently collecting sales or value added taxes that we
should be, or should have been, collecting indirect taxes on the sale of our products could result in substantial tax
liabilities for past sales.
If we are unable to retain security authentication certificates, which are supplied by a limited number of
third party providers over which we exercise little or no control, our business could be harmed.
We are dependent on a limited number of third party providers of website security authentication certificates
that are necessary for conducting secure transactions over the Internet. Despite any contractual protections we may
have, these third party providers can disable or revoke, and in the past have disabled or revoked, our security
certificates without our consent, which would render our websites inaccessible to some of our customers and could
discourage other customers from accessing our sites. Any interruption in our customers' ability or willingness to
access our websites if we do not have adequate security certificates could result in a material loss of revenue and
profits and damage to our brands.
Risks Related to Our Corporate Structure
Challenges by various tax authorities to our international structure could, if successful, increase our
effective tax rate and adversely affect our earnings.
We are a Dutch limited liability company that operates through various subsidiaries in a number of countries
throughout the world. Consequently, we are subject to tax laws, treaties and regulations in the countries in which we
operate, and these laws and treaties are subject to interpretation. From time to time, we are subject to tax audits,
and the tax authorities in these countries could claim that a greater portion of the income of the Cimpress N.V.
group should be subject to income or other tax in their respective jurisdictions, which could result in an increase to
our effective tax rate and adversely affect our results of operations. For more information about audits to which we
are currently subject refer to Note 14 “Income Taxes” in the accompanying notes to the consolidated financial
statements included in Item 8 of Part II of this Report.
Changes in tax laws, regulations and treaties could affect our tax rate and our results of operations.
A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate
could result in a higher tax rate on our earnings, which could result in a significant negative impact on our earnings
and cash flow from operations. We continue to assess the impact of various international tax reform proposals and
modifications to existing tax treaties in all jurisdictions where we have operations that could result in a material
impact on our income taxes. We cannot predict whether any specific legislation will be enacted or the terms of any
such legislation. However, if such proposals were enacted, or if modifications were to be made to certain existing
treaties, the consequences could have a materially adverse impact on us, including increasing our tax burden,
increasing costs of our tax compliance or otherwise adversely affecting our financial condition, results of operations
and cash flows.
Our intercompany arrangements may be challenged, which could result in higher taxes or penalties and an
adverse effect on our earnings.
We operate pursuant to written intercompany service and related agreements, which we also refer to as
transfer pricing agreements, among Cimpress N.V. and its subsidiaries. These agreements establish transfer prices
for production, marketing, management, technology development and other services performed by these
subsidiaries for other group companies. Transfer prices are prices that one company in a group of related
companies charges to another member of the group for goods, services or the use of property. If two or more
affiliated companies are located in different countries, the tax laws or regulations of each country generally will
require that transfer prices be consistent with those between unrelated companies dealing at arm's length. With the
exception of certain jurisdictions where we have obtained rulings or advance pricing agreements, our transfer
pricing arrangements are not binding on applicable tax authorities, and no official authority in any other country has
made a determination as to whether or not we are operating in compliance with its transfer pricing laws. If tax
authorities in any country were successful in challenging our transfer prices as not reflecting arm's length
transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these
revised transfer prices. A reallocation of taxable income from a lower tax jurisdiction to a higher tax jurisdiction