Within the framework of due diligence/ tax audits, we develop our audit process in accordance with the needs of our Customers.
The two types of due diligence/ tax audits are: the one linked to company transformations and tax audits that prevent tax examinations, and these two types have different purposes. However, it is true for both types, that during screening we perform a simulation of a tax authority control.
Due diligence/ Tax audits related to company transformations usually take place when, during a takeover, the potential buyer wants to know the tax liability of the company that has been purchased for the purpose of legal succession. In this case, the tax risk factors revealed during the due diligence can significantly influence the price between the parties.
Another type of due diligence is the tax audit prior to tax controll/ examination, in which case the costumer is the audited company or its shareholder itself. The main purpose of such an investigation is to filter out possible tax risks and to clarify how the identified shortcomings can be managed in order to reduce the tax differentials established by a possible revision.
We do the due diligence as detailed and deep as requested by our Partners. The work begins by compiling the pre-agreed detailed test program, which is the basis of the screening. Our screening program contains a detailed description of both the type of tax types audited and the test method.
The due diligence can be targeted to filter out the most important, most risk-sensitive topics, and also to a more comprehensive audit; involving more tax varieties and deeper analysis of transactions. It can contain also so-called ’system audits’ to check how each data and information is generated and processed until tax return.
At the end of the audit, the topics of the disclosed tax spread are recorded in a report which, according to the Customer's request, contains the amount of our estimated tax spread and our proposals for their management.
The colleagues of BDO Hungary Tax Advisory team are pleased to assist you with any relevant question. Please contact us: firstname.lastname@example.org.