Deal Advisory – Tax

Deal Advisory – Tax

KPMG offers a range of tax services to corporate and private equity investors to help with local and cross-border transactions.

KPMG offers a range of tax services to help with local and cross-border transactions.

Business today is under more pressure than ever to deliver better, lasting results for stakeholders. At KPMG, we think like an investor, looking at how opportunities to buy, sell, partner, fund or fix a company can add and preserve value. Today’s deals do not happen in a vacuum. So from your business strategy to your acquisition strategy, your plans for divestments or for raising funds, or even your need to restructure, every decision must be made in light of your entire business, your sector, and the global economy.

We can help companies understand processes, avoid pitfalls and seize opportunities of deals. We understand the practical impact of tax developments and when we spot opportunities, we know how to act on them to benefit stakeholders.

Our Tax professionals are commercially minded and deal-hardened and understand the mechanics of acquisition and disposals in a competitive environment – they know how to identify and advise on the material tax exposures in a transaction and to develop deal structures that appropriately address the tax implications.

KPMG's Deal Advisory, Tax group offers a range of tax services to corporate and private equity investors to help with local and cross-border transactions. Our services include:

  • Tax due diligence – identifying the tax exposure of a deal and how it may be mitigated, with clear focus on risk assessment.
  • Structuring an acquisition or disposition – advice on the tax consequences of individual acquisitions, joint ventures and divestments in order to help design tax-efficient deal structures.
  • Tax modelling – assistance in forecasting post-deal tax liabilities in business models.
  • Vendor assistance – preparation of vendor side documentation and tax advice on the tax implications of the sale of a business, including pre-deal reorganisation measures and settlement of historic tax risks.
  • Post-deal integration – helping member firms' clients reconcile their own tax positions and those of the acquired business.

Why tax-efficient mergers and acquisitions matter

Companies with global ambitions cannot afford to ignore the opportunities for possible growth offered by mergers, acquisitions and disposals. But if these transactions are to create real value, it is important that the tax implications of each deal are dealt with from the onset. This is especially important in cross-border deals, where differing regulations and business cultures need to be reconciled in order to reveal the risks and opportunities of a transaction.

Similarly, private equity seeking to increase return on investment cannot afford to ignore tax. Recent trends show that M&A transactions have become more international and deal volumes have increased tremendously. Highly-leveraged transactions allow for big ticket deals, particularly within private equity market.

Understanding how a deal is done

In a highly professional and competitive deal environment, many transactions are organised as structure auctions. Only the strongest bidder will win. When strategic investors compete with private equity for a few attractive targets offered, understanding how a deal is done becomes critical. To assess the real value of a transaction you need to understand the historical tax risks associated with an enterprise for sale. To win an auction, you can also need to evaluate and quantify upside potential. In many cases, tax can make a difference.

Getting the timing right

Running an M&A process means coordinating many different work-streams within a very strict timeline. In the auction processes, there is little flexibility surrounding bid deadlines. Deadlines are short to keep management attention to an acceptable minimum. Valuable time can be lost just trying to organise your deal team. Tax due diligence, international acquisition structuring and modelling tax in the acquisition target's business forecast should be addressed immediately.

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