Transactions: acquisitions, mergers, disposals
Tax aspect of M&A transactions
In practice, prior to a transaction of acquisition of a company or enterprise, the tax analysis of the acquired business is usually limited to the basic due diligence review. Frequently, an industrial investor’s acquisition of a company results in significant changes in the structure not only of the acquired company but also of other companies in the group. In such situations, the acquirer may be surprised by the tax efficiency of the ownership structure after the new entity is integrated into the group.
Therefore, early tax planning, such as elaborating the tax structure of the acquisition and detailed analysis of the structure of the target, allows for reducing the transaction’s tax costs, better structuring the cash flow within the group, and assessing the acquisition’s attractiveness.
Our approach
We believe an individualized, in-depth tax analysis can significantly reduce the tax risk often accompanying such transactions and provide measurable financial and business benefits.
We have many years of experience in tax transaction consulting. The recipients of our services are financial investors (tax-transaction advisory services for private equity funds), industrial investors (tax assistance in the acquisition of Polish companies in a particular industry), and Polish entrepreneurs selling their shares or issuing shares to external investors.
Our clients (who are usually not tax specialists but financiers or entrepreneurs) receive assistance in making more informed decisions regarding the required tax analysis. Instead of a standard product, we are able to offer a service tailored to the client’s actual needs and business situation.
We provide the investors with the following services:
Due diligence, aimed at estimating the amount and value of the real tax risk (and not the theoretical doubts resulting from the quality of Polish regulations); the result of the review is delivered in a form adapted to the needs of the client and the scope of the review (e.g., we discuss its details during the course of our work depending on the current observations)
Extended due diligence, aimed mainly at diagnosing the possibility of limiting the tax risk resulting from post-acquisition settlements (e.g., in a situation of too liberal a tax policy in the acquired company) and enabling an assessment of the effectiveness of the business in terms of, for example, the possibility of tax consolidation with other companies, efficient loss compensation, etc.
Preparation of tax-effective acquisition structures for new capital investments, taking into account both the group’s policy, business objectives, and specifics of the planned transaction, including, e.g., tax verification of acquisition financing costs, possibilities of profit distribution of the acquired company, adjustment of the tax value of the acquired assets, etc. (depending on the type of transaction, financing scheme) and assistance in settlement of transaction costs (PCC, other costs and indirect taxes).