What is tax due diligence?
Tax due diligence is the process of evaluating the tax risks and opportunities associated with a potential transaction. It involves a detailed review of the target company's tax history, compliance, and potential exposures, such as unpaid taxes, undisclosed liabilities, or tax planning strategies that could trigger a tax audit or penalty.
While relying on warranties and indemnities may provide a purchaser with a mechanism to recover unprovided tax liabilities, this process will undoubtedly be costly and take time.
By identifying any risks early on, you can negotiate better terms, allocate risks, and plan for post-transaction integration.
We can review the target’s tax position in relation to:
- Corporation tax
- Share and Share Option Schemes
- Employment Related Securities
- Employment taxes
- R&D Tax Credits
- Historical group reorganisations
- Transfer Pricing and intra group transactions
- Tax exposures from historical tax planning arrangements