Regardless of the type and features, the relevant parties of any corporate transaction need to consider the two fold tax implication of pre and post transaction. A well conducted tax due diligence, in conjunction with legal, operational and financial reviews exposes the significant issues and opportunities and helps achieve a successful investment.
Before the transaction takes place, the buyer needs confidence that the target has maintained sound tax compliance so far and the transaction will not lead them to accrue additional tax liability or facing of litigations for previous defaults or violations. In the tax review service we utilize our expertise to scrutinize the historic tax profile of the target organization to review their status of tax compliance and efficiency of tax practice and identify any potential tax risks and exposures that might be carried over to the purchaser. Based on our assessment we also prescribe any adjustments to be made in purchase price and inclusion of appropriate tax warranties and indemnities to be made in the contract, for the benefit of the acquiring party
The acquirer also needs to analyze the likely tax exposure of the new business structure after the transaction takes effect. We forecast the post-closing tax exposure and risks based on analysis of the projections of the intended transaction and suggest alternatives for tax optimization.
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