Deloitte Launches Dynamic Modeling and Visualization Tool for Tax Reform Advisory Services
Tax reform uncertainty spurs new offering for corporate tax departments
NEW YORK, July 17, 2017 — Sixty-one percent of U.S. tax professionals say their business decision-making around tax reform can benefit from scenario-based planning, according to a Deloitte survey. Deloitte addresses this need with the launch of a new service offering that leverages Tax Reform Navigator, a state-of-the art, web-based solution that uses actual and projected financial data to provide a holistic view of how potential tax reform proposals are likely to impact a company.
“Companies that prepare now may be better positioned to act advantageously if and when tax reform is enacted,” said Terri LaRae, partner and national leader of Tax Reform Advisory Services, Deloitte Tax LLP. “We created Tax Reform Navigator to enhance Deloitte’s tax reform advisory services and give companies the confidence to make informed decisions during uncertain times.”
The tool can account for a number of variables and be customized to explore a range of scenarios when creating an integrated plan with domestic and international tax considerations. Along with our tax advisory services, some of the scenarios upon which the tool provides insight include:
- Impact on existing attributes: Some organizations have voiced an interest in proactively modeling the impact of various reform proposals on existing attributes in order to strategize around pre-reform planning considerations.
- Acquisitive organizations: Congress is discussing a provision that disallows a deduction for net business interest expense, which could affect highly-leveraged M&A deals because the resulting net interest expense might no longer be fully deductible.
- Supply chains: Many organizations would be affected by the border adjustable tax and territorial tax being discussed in the U.S. House of Representatives.
- Debt-intensive industries: Organizations such as private equity firms may want to keep close watch on proposals that aim to replace the net business interest expense deduction with full expensing of capital purchases. If the deduction is repealed, there may be a grandfathering clause or other transition rules.
- Multinational organizations: A transition tax has been mentioned by lawmakers as a way to fund U.S. infrastructure projects. Such a tax would likely result in current tax on the past deferred earnings of multinational organizations if adopted.
The Tax Reform Navigator compares company data side by side and measures the potential impact of proposals in the House GOP blueprint, President Trump’s tax plan and the Tax Reform Act of 2014 (introduced but not voted on). Our services include 24/7 online access to dashboards and at-a-glance reports. Deloitte works with clients to design and generate reports that communicate tax reform planning progress to C-level executives, boards and other stakeholders to help inform business decisions and other efforts.
“Effective tax reform planning requires companies to explore different approaches and evaluate likely outcomes relative to their specific businesses,” LaRae added. “The feedback we have received from clients has been positive. We plan to expand the tool’s features in the next month to include additional tax forecasting capabilities and visualize state-level tax implications.”
Tax Reform Navigator was developed by Deloitte’s national federal tax services practice as part of the firm’s innovation initiative. For more information on the tool and Deloitte’s tax reform solutions, visit www.deloitte.com/us/tax-reform-navigator.
About the Survey
A poll of more than 700 executives across a variety of industries was conducted during a Deloitte webcast focused on the outlook and planning around US tax reform. The webcast was held May 24, 2017, and titled “Mapping your tax reform future.”
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including 80 percent of the Fortune 500 and more than 6,000 private and middle market companies. Our people work across more than 20 industry sectors to deliver measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to make their most challenging business decisions with confidence, and help lead the way toward a stronger economy and a healthy society.