Throughout the lifecycle of a business, situations such as acquisitions, disposals, corporate restructurings or tax authority audits may arise where a comprehensive assessment of existing tax risks becomes essential.
How can we help?
The purpose of a tax due diligence is to provide a comprehensive overview of a company's tax practices, identify potential risks, and highlight areas where processes or tax treatment may require improvement. We tailor each due diligence to the client's objectives and the specific characteristics of the business.
Identifying Tax Risks
We comprehensively analyse the company's tax practices, identify potential risks, and assess their financial and legal implications.
Transactions and Corporate Restructuring
We conduct tax due diligence before acquisitions, disposals, mergers, demergers and other corporate changes, supporting informed business decision-making.
Preparation for Tax Audits
We assist clients in preparing for tax authority audits, review critical areas, and recommend measures to address identified risks before the audit begins.
Review of Documents and Processes
We analyse contracts, internal processes and other relevant documents from a tax perspective to ensure that they comply with applicable legislation and established tax authority practice.
Support in Tax Authority Proceedings
We provide professional support during tax authority audits, assist with the preparation of observations, statements and appeals, and support our clients throughout the entire procedure.
Detailed Professional Report
We summarise the results of the due diligence in a clear and transparent report presenting the identified risks, their expected impact, and practical recommendations for the necessary measures and the mitigation of future risks.
When Is a Tax Due Diligence Particularly Advisable?
A tax due diligence can be useful not only in problematic or high-risk situations. In many cases, a preliminary review carried out before significant business decisions can help a company make informed decisions based on reliable information and within a more predictable tax environment.
Acquisition or Sale of a Company
Before a transaction, it may be important to review the company's historical tax practices, potential risks and outstanding tax liabilities.
Significant Business Change
In the case of a new business model, significant investment, corporate restructuring or other strategic change, it is advisable to assess the related tax implications.
Before a Tax Audit
Identifying potential deficiencies and risks in advance can create an opportunity to address them before the tax authority audit begins.
Recurring or Significant Tax Risks
If a company's operations are complex or involve processes affecting multiple taxes, periodic tax due diligence can help keep risks under control.
The Tax Due Diligence Process
During the due diligence, we follow a structured process covering the relevant tax areas of the business. The scope and depth of the review are tailored to the client's objectives, the company's operations and the specific characteristics of the transaction.
1. STEP
Defining the Areas of Focus
We gain an understanding of the company's operations and the purpose of the review and identify the tax areas relevant to the due diligence.
2. STEP
Review of Documents
We review the contracts, tax returns, calculations, internal policies and other relevant documents provided to us.
3. STEP
Tax Analysis
We analyse the tax practices applied, identify discrepancies and assess potential tax risks.
4. STEP
Risk Assessment
We assess the significance and expected impact of the identified risks and the available options for addressing them.
5. STEP
Recommendations and Report
We summarise the results of the review and provide practical recommendations for addressing the identified risks and improving processes.
What Do We Provide Our Clients at the End of the Due Diligence?
The outcome of the due diligence is not merely a list of identified issues. Our aim is to provide clients with a clear understanding of their company's current tax position, significant risks and their potential implications.
In addition to the identified risks, our professional report includes specific, practical recommendations to help the client make the necessary business and tax decisions on a well-informed basis.
Frequently Asked Questions
We have collected the questions most frequently asked in connection with tax due diligence.
When is a tax due diligence advisable?
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A tax due diligence may be particularly advisable before significant business transactions, acquisitions, disposals, corporate restructurings, tax audits or major business changes. At the same time, it can also be useful as a regular review to identify tax risks at an early stage.
What is reviewed during a tax due diligence?
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The scope of the due diligence depends on the client's objectives. The review may cover, among other things, tax returns, tax base calculations, contracts, transactions, internal processes, documentation and the tax practices applied by the company.
Is a tax due diligence only intended to identify problems?
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No. The purpose of the due diligence is not limited to identifying existing problems. The review may also identify opportunities to make the company's tax processes more efficient, transparent or compliant.
Is a due diligence useful before an acquisition?
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Yes. Before an acquisition or other significant transaction, a tax due diligence can help identify tax risks arising from the company's historical activities, which may affect the valuation of the transaction and related decisions.
What does the client receive at the end of the due diligence?
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We summarise the results of the due diligence in a detailed professional report. The report presents the identified risks, their potential implications, as well as practical recommendations for addressing them and improving processes.
Can a due diligence be requested for a specific area or tax type?
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Certainly. A tax due diligence can also be focused on a specific tax type, transaction, business process or particular tax issue. The scope of the review is always tailored to the client's needs and objectives.
Do You Have a Tax Question?
Are you unsure whether your company's tax practices are appropriate, or would you like to identify potential tax risks before making a significant business decision? We can help you identify the relevant areas, assess your tax position and determine the necessary steps.
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