Tax representation and tax due diligence – managing tax risks

From time to time it is worth reviewing the operational and administrative processes, which can benefit the company from two fundamental points of view. On the one hand, tax due diligence helps detect possible risks before an audit by the tax authority, so these errors can be rectified by self-revision without having to pay fines and late payment surcharges. Therefore, major surprises, costly legal consequences and the need to make significant investments of time, energy and financial resources, which may arise from protracted legal disputes, can be avoided. 

In addition, the identification, in the course of a systematic investigation, of areas where the company can achieve effective tax savings is an additional advantage, through the use of opportunities for reducing the tax and/or the tax base, as well as the appropriate tax planning of a given transaction(s).

In the course of audits by the tax authority, the final result of the audit is heavily influenced by the provision of competent tax representation. A professionally well-grounded observation on the minutes of the tax authority can result in actual cost reductions already at the stage of the first instance decision. It is also important to note that in case of a comprehensive tax authority audit, in the course of a subsequent appeal, no such facts or circumstances can be brought forward by the company that were not already submitted in the tax audit stage (until the deadline for making observations).

In our experience, it is worth using the services of a tax advisor from the earliest possible stage of the audit, as there is a multiple-times return of its cost by way of a reduction of the fines and other findings.

Our tax representation and tax due diligence services 

• systemic examination preceding tax audits (assessment of tax risks and proposals for solutions);
• in the course of the system due diligence, the identification of opportunities for reducing the tax and/or the tax base, as well as the tax-effective design or changing of a transaction;
• participation in the course of tax audits, maintaining contact with the tax authority;
• evaluating the findings in the tax authority’s minutes, making proposals for points that are professionally defensible, developing a system of arguments against findings that can be challenged, drawing up the observations;
• the professional preparation of the appeal;
• the comprehensive representation of our clients before the tax authority and/or the courts;
• drawing up requests for official positions of Ministry of Finance and/or the tax authority and preparing and submitting binding rulings.

Either as part of conducting financial due diligence or also independently from it, we undertake the performance of tax due diligence of companies. As a result, investors can obtain a reliable picture of the tax risks inherent in the company they want to purchase, but even the shareholders themselves can obtain important information before the company is offered for sale.

If you have any questions in connection with our services, please contact our advisor colleagues.