When it comes to planning for a business sale, tax due diligence may be viewed as an afterthought. However the results of tax due diligence could be vital to the success of any transaction.
A thorough examination of tax laws and regulations can uncover potential deal-breaking issues before they become a problem. They can range from the fundamental complexity of a company’s tax structure to the nuances of international compliance.
The tax due diligence process also examines whether a company is likely to create digital rooms’ role in contemporary business an taxable presence in different countries. For example, an office in a foreign location could create local income and excise taxes and, even though a treaty between the US and the foreign jurisdiction might mitigate the impact, it’s crucial to be aware of tax risks and opportunities.
We review the proposed transaction, the company’s transactions with acquisitions and disposals in the past, as well as review any international compliance issues. (Including FBAR filings) As part of our tax due diligence process, we also review the documentation on transfer pricing as well as the company’s documents relating to the transfer price. This includes assessing the assets and liabilities’ tax basis and identifying tax attributes that could be utilized to maximize the value.
Net operating losses (NOLs) can occur when a company’s deductions exceed its taxable income. Due diligence can be used to determine if these NOLs can be realized and if they are transferable to the new owner in the form of an income tax carryforward or used to reduce tax liabilities after a sale. Unclaimed property compliance is another tax due diligence item. While not strictly a tax issue the state, tax authorities are becoming more scrutinized in this field.
Comentarios recientes