When you acquire a company or become a shareholder, its past tax risks come with it. In a tax due diligence we review the target's returns, records and ongoing tax positions, and calculate potential assessments and penalties in monetary terms.
Since the general statute of limitations for tax assessments is five years, the work usually covers the last five financial years. We report our findings clearly enough to be used directly at the negotiating table and in the indemnity provisions of the purchase agreement.
Scope of work
In every engagement we cover the following areas, tailored to the structure of your company.
- 01
Reviewing corporate tax, VAT and withholding compliance
- 02
Quantifying potential tax assessments and penalties
- 03
Related-party and transfer pricing risks
- 04
Checking incentives, exemptions and deductions
- 05
Input for tax indemnities and warranties in the purchase agreement
- 06
Roadmap for post-closing tax compliance
How we work
- 01
Scope and confidentiality
We define the deal structure and review areas and set up confidentiality.
- 02
Data room review
We systematically examine returns, books, contracts and correspondence.
- 03
Risk measurement
We estimate the likelihood and potential amount of each finding.
- 04
Report and presentation
We present the results with an executive summary and support contract negotiations.
Who it is for
Investors and companies planning an acquisition, merger or shareholding, and businesses that want to see their own tax position before a sale.