A tax due diligence plays a critical role in any M&A transaction.
Vendor tax due diligence aims to address tax issues and concerns that may be relevant to even the most demanding purchaser. It is an in-depth report on the ”tax health” of the company that is being sold. The vendor due diligence report is made to all bidders and relied upon by the acquirer.
Buyer tax due diligence aims to identify and quantify actual and potential tax liabilities that have not been taken into account in the financial statements of the target. It will help the buyer to see a clear picture of target’s current tax position. It is critical to making right decisions about managing transaction risk early in the process.