Are you contemplating changes to your organization’s legal entity structure due to the implications of US tax reform and operational considerations? Legal entity strategy and simplification (LESS) is a viable solution – LESS is the process of evaluating legal entity structures for the purpose of reducing the overall number of legal entities. In today’s environment, with tax reform complexity, cost pressures, and increasing M&A activity, a strategic approach to streamlining legal entities is called for. The main objectives of a LESS exercise are to enable M&A integration, achieve SG&A cost reduction, facilitate a flexible business operating platform, and importantly – respond to US tax reform by refreshing your tax strategy.
Traditional legal entity simplification approaches have resulted in some success but are limited in scope and benefits. A new approach, Whiteboarding the Art of the Possible, is an innovative method that allows you to establish a vision for your legal entity organization structure and develop a plan to get there. It is the most strategic approach that considers alignment to the overall business –It’s not just about reducing the number of legal entities. Let’s take a closer look at the various approaches to legal entity strategy and simplification:
As mentioned earlier, Whiteboarding is a strategic approach that offers the most benefits to organizations looking to streamline their legal entity structure. It allows the creation of a vision for legal entity organization that is aligned with business needs and enables the design of a roadmap to achieve that ‘ideal’ structure. Whiteboarding causes Tax to think holistically about the overall business, engaging leaders from multiple enterprise functions (including Treasury, Legal, Human Resources, IT, Operations, and others) in the process.
US Deals, Strategy & Operations Leader for Tax Reporting & Strategy, PwC US
Principal, Tax Reporting and Strategy, PwC US