Tax DD

Every business owner knows they’re required to pay income tax, however this is only the tip of the iceberg in terms of potential tax obligations. So, a thorough investigation of a target company’s tax obligations and the tax implications of the deal itself are critical to a profitable transaction.

THE TAX DUE DILIGENCE PROCESS

The due diligence process where tax is concerned, involves the following components:

• Understanding the target’s existing tax structure

• Understanding the expected transaction structure

• Reviewing the target’s historical tax compliance

• Identifying any historical tax exposures

The aim is to determine what responsibilities, liabilities and tax issues exist.