International tax quarterly update
The benefits to be gained from corporate simplification
The prevailing model of large and complex legal structures is under increasing pressure from a cost and efficiency perspective. Legacy structures lead to inefficient use of resources, value erosion and unnecessary direct and indirect carrying costs. Corporate simplification can remove costs and risks, helping companies in their transition to a higher value, more efficient legal structure.
Corporate simplification has a range of models. Legal entity reduction programs remove dormant and low value entities from the corporate structure. Legal entity rationalisation involves a more strategic centralisation of cost and profit centres into strategic hubs. The most significant target model is the move to a single entity structure in which a high value entity, with centralised control, profitability and management, operates in a geographic territory or area of business.
The transition and design of the target model involves multiple tax efficiency drivers. Detailed legal and tax analysis is a key part of the plan and tax optimisation an important element of these projects. This webcast will discuss:
- Benefits of a corporate simplification program
- Potential target structures and issues arising on transition
- Tax and transfer pricing analysis required to achieve an improved target structure.