Group Rationalisation

Amidst efforts to combat inefficiencies, multinational companies, led by their CFOs, are embracing Group Rationalisation to enhance cost-efficiency in today's turbulent economy. Streamlining the legal entity chart not only drives cost efficiency but also bolsters crisis readiness, resulting in an agile organisation that facilitates both internal and external restructuring.

From a CFO perspective, the benefits seem straightforward: shutting down dormant entities and saving administrative costs—simple, right? Go for it!

However, for the tax team, it's a different story 😭(as is often the case with restructurings and related projects)! Typically, the tax team takes the lead, collaborating with various departments: legal, treasury, finance, IT, HR. Reason why? Tax team is the true spider in the web between these departments, and tax also has (at least minimal) knowledge in these domains.

But here is the problem 🚨: rationalisation often isn't a priority for the other departments. They have very different objectives and agendas. In other words: there is not always a full buy-in from the other departments. You know what they say: for the strength of the pack is the wolf, and the strength of the wolf is the pack. If there is only one wolf fully dedicated, you can guess what the outcome will be…

Getting started is the easy part in these projects. However, motivation diminishes as energy wanes along the way, with bottlenecks and unexpected delays prolonging timelines, sometimes pushing projects into the next fiscal year or even oblivion. 🌌 And let's not forget the added complexity of involving other stakeholders and advisors, all while juggling budget constraints! It's like trying to solve a Rubik's Cube in zero gravity! 🚀🧩

To prevail, we must confront these challenges, foster collaboration, and emphasise efficient communication, shaping leaner and more resilient organisations.

Dive deeper into this topic in Loctax's whitepaper ➡️ Group Rationalisation Whitepaper