Modeling for potential tax reform

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The Tax Cuts and Jobs Act of 2017 will impact important business decisions you need to make. Using PwC's modeling technology we can help your organization evaluate different scenarios for better tax planning.


Executives are looking for guidance on what the impact of tax reform will be for their company. The uncertainty created by changes to the tax code underscores the importance modeling can have to help private companies.

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Tax modeling can help your business evaluate different scenarios for better tax planning.

Watch other video on this topic: Tax reform and modeling for private companies

What is TRIM?

PwC is using our Tax Restructuring Impact Model (TRIM) as a way to initiate an ongoing discussion regarding tax strategy to answer questions like the following:

  • How would the Blueprint affect my company’s profits?
  • Are there aspects of the Blueprint where additional detail is necessary to assess impact?
  • What provisions of the Blueprint have the most significant tax impact for my company?
  • Whether and how should my company engage in the legislative process?
  • Are there opportunities to reduce the tax impact of the Blueprint?
  • How can we monitor tax reform developments?

How we can help you

TRIM allows organizations to quickly assess the impact of tax reform proposals, including the House GOP Blueprint based on tax return data and other information.

TRIM provides a flexible and efficient way for companies to identify structural tax issues with significant financial impact, assess opportunities for tax planning and evaluate legislative proposals. The analysis provides your organization with a report that includes:

  • Cash tax impacts of proposals
  • Illustrative calculations of tax liability under the particular tax reform proposal(s) being considered
  • Reconciliation of your company’s tax base under the proposal(s) current law
  • Sensitivity of results to alternative interpretations of proposals or to alternative tax reform designs


How we have helped others

Ambiguity in tax policy creates uncertainty

The Chief Operating Officer and other members of management of a US-based, private, industrial manufacturing firm with global operations wanted to understand the implications of proposed tax reform in the GOP House Blueprint as it pertained to the border adjustment tax, which proposes to dramatically change the way imports and exports are taxed for US companies.

What we did

PwC’s modeling tool, TRIM, provided the client with an easy-to-read overview that included a high-level tailored summary of the GOP House Blueprint and calculations based on previous year’s tax returns. It explained the implications that the GOP House Blueprint would have on their business, which demystified the issue of tax reform under the plan for the management team and provided insight regarding the magnitude of the impact.

Results

The quick turnaround and easy to follow overview was received enthusiastically and shared among the firm’s executive team. TRIM’s analysis was able to provide clarity regarding the impact of the border adjustment and other tax changes in the plan, ultimately pointing to the fact that the company could anticipate a tax savings under the plan of approximately $2m per year. The TRIM analysis has led to more, deeper conversations about how modeling can help in future tax strategy and planning at their company.

 

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Modeling used to develop tax strategy for private company

A private company needed to better understand how to prepare for potential changes to the tax code but didn’t have the in-house staff to conduct the necessary analysis. Specifically, they wanted to understand what provisions of the GOP House Blueprint would have the most significant impact for their company. Potential changes to tax policy was creating uncertainty in their planning and making it difficult to prepare accordingly.

What we did

PwC had the client answer a few questions and share their previous year’s tax return. The information was shared with PwC’s National Economic and Statistics practice, which ran models based on the client’s tax history and various scenarios based on key policy provisions in the GOP House Blueprint.

Results

Within a few days, PwC was able to share a brief document that explained the impact tax policy changes could have on their company. The TRIM overview also included an easy-to-follow scenario plan for the tax team to leverage, which they did by sharing with the executive team to help them with additional strategic planning for the coming year.

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Learn more about PwC’s tax modeling solution: TRIM


We have created a tax modeling tool called Tax Restructuring Impact Modeling (TRIM) that can answer strategic questions and help you with your planning.

Complete the form below if you would like to have someone from PwC contact you about our modeling solution.

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Contact us

Mark Borden
Private Company Services Tax Leader
Tel: +1 (713) 356 5645
Email

David Zimmerman
Private Company Services, Tax Strategy Leader
Tel: +1 (813) 222 7057
Email

Drew Lyon
Principal and National Economics and Statistics Leader, PwC US
Tel: +1 (202) 414 3865
Email

Peter Merrill
Principal, National Economics and Statistics Practice, PwC US
Tel: +1 (202) 414 1666
Email

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