In the ever-evolving business environment of China, conducting thorough financial and tax due diligence has become an indispensable step for companies undergoing mergers and acquisitions (M&A) or restructuring. The Chinese tax authorities rigorously scrutinize the tax compliance status of companies, particularly those undergoing significant corporate changes like deregistration, mergers, or relocations. Furthermore, a company's financial status and tax treatment of its past operations can significantly impact the tax treatment of M&A and restructuring transactions.

Importance of Due Diligence

Before embarking on an M&A or restructuring process, conducting a systematic Financial and Tax Due Diligence or internal tax health check is highly recommended. This process serves multiple purposes:

Ø Risk Identification: A comprehensive due diligence helps uncover potential tax risks, allowing for timely handling through various approaches tailored to specific circumstances.

Ø Risk Mitigation: Early detection of tax risks through due diligence reduces the likelihood of unexpected costs, penalties, or legal disputes during or after the M&A/restructuring process.

Ø Tax Planning Opportunities: A review of a company's financial and tax issues provides valuable insights for exploring tax planning opportunities, which can optimize the tax treatment of the transaction and yield long-term tax benefits.

Ø Enhanced Decision-Making: With a clear understanding of the target company's financial and tax situations, businesses can make informed decisions regarding the transaction's feasibility, valuation, and strategy.

Our Services

At our firm, we specialize in providing comprehensive financial and tax due diligence services tailored to the unique needs of our clients in China. Our team of experienced tax professionals conducts a rigorous review of our clients' financial statements, tax records and contractual agreements. We identify potential tax risks, explore tax planning opportunities, and provide strategic advice to ensure compliance and optimize tax savings.

Our due diligence services cover various aspects, including tax compliance review, financial status assessment, contractual analysis, tax planning recommendations, etc.