Tax DD – external vs internal ?

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  • #115797

    Gregory Weisser
    Participant

    Tax DD can be very complex and bears risks. From my experience we always engaged externals. Basically not just due to the lack of tax knowledge, but also to get a 3rd party opinion in that risky field.

    What would you consider in regards to covering a tax DD internally (own staff) or engaging someone external (big 4, tax consultant etc) rather doing on your own?

    #115846


    Participant

    Hi Gregory,

    You have raised an interesting question. I would get an external party to undertake the DD and the top element which I would be asking them to look for are elements of deferred taxation liabilities. Quite often I have found that a target looks great until I realise that they have been pursuing an aggressive tax avoidance policy for which I would then become liable for as the buyer. Additionally, double checking the value of any major assets relative to tax perspective, as aggressive devaluation processes could also leave me with problems.

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