Tax Due Diligence
The main objective of a Tax Due Diligence is to obtain reasonable assurance, as a result of the procedures and activities performed, that the business entity has properly calculated and settled its tax and quasi-tax liabilities during the relevant period.
Specifically, the agreed-upon procedures include verifying—largely on a sample basis—the documentation that supports the figures and information reported in tax and quasi-tax returns.
Tax Due Diligence is designed to pinpoint potential threats and exposure areas across tax domains, identify viable tax-saving (optimization) opportunities, and outline strategic directions for the company’s future tax policy.
This engagement involves periodically examining the accuracy of tax bases, taxable items, and the accounting classification of business events under tax law. The goal is to uncover potential irregularities that could otherwise trigger severe penalties from tax and fiscal audit authorities.
For potential buyers, this process helps mitigate transaction risks arising from non-compliance in the target entity’s public-law liabilities. Moreover, should the deal proceed, a well-informed Client (Company) can take timely corrective action by filing amended tax returns for past settlement periods.
Eliminating past errors can also serve as a basis for claiming refunds on overpaid taxes or other budgetary fees. Concurrently, identifying the root causes of incorrect filings empowers our Clients to eliminate systematic errors going forward, ensuring future compliance and avoiding fiscal penal sanctions.
Our specialists identify actionable solutions to optimize tax positions and, upon request, directly assist with in-house implementation.
The procedures conducted during a Tax Due Diligence also prepare your organization for potential future tax inspections, particularly regarding data readiness and presentation formats. A major value-add of our reviews is building cross-departmental awareness: it aligns non-finance teams whose everyday activities impact tax and customs obligations—such as sales, marketing, and procurement—to collaborate more effectively with accounting and finance.
Our approach relies on close collaboration with the Client, ensuring all raised doubts and questions are thoroughly discussed throughout the engagement. Whenever an irregularity or risk is identified, we present practical, actionable options to eliminate or minimize the exposure.
As with standard tax audits, our fees are tailored individually for each engagement, primarily based on the scope and estimated labor intensity of the planned activities.
