M&A Tax

M&A Tax

Taxes are at the heart of any deal in today’s global economy.

Taxes are at the heart of any deal in today’s global economy.

They are equally important for strategic planning and structuring of a transaction as well as for its execution and post-deal integration processes ensuring that tax risks and opportunities are identified. 

KPMG in Bulgaria’s M&A Tax team combines a global focus with local knowledge to help clients maximise value from cross-border M&A deals.

Rising tax audit scrutiny of domestic and cross-border M&A structures and expected future international tax reforms on an EU and global level are causing anxiety in the M&A markets. 

The Bulgarian revenue authorities are working to increase tax revenue by shoring up tax bases and curbing aggressively financed M&A transactions. For this purposes they have started entering into more information exchange agreements and making greater use of agreements already in place. 

The increased attention of the tax administration on shareholding structures, deal financing and transfer pricing aspects of restructurings may lead to denial of deductions for tax purposes or assessment of additional taxable gains or revenue to taxpayers. 

KPMG’s M&A Tax team helps clients identify and manage material tax exposure, as well as design deal structures that enhance after-tax returns and avoid fiscal pitfalls and adverse post-transaction tax implications. 

We assist clients in developing tax planning ideas and effective structuring strategies tailored to their specific needs. 

Our professionals work closely with KPMG’s Deal Advisory and Legal teams and other M&A Tax professionals from the KPMG network worldwide to provide focused and extensive advice. 

Through multidisciplinary teams, we offer a wide range of M&A Tax services covering all stages in the life cycle of a deal.

Tax due diligence

  • Reviewing target’s historic tax profile and identify potential tax exposures or significant tax attributes and their impact on a transaction from purchase-side perspective   
  • Reviewing target’s historic tax position and identify tax-saving opportunities from buy-side perspective

Tax structuring of mergers, acquisitions and disposals

  • Developing tax-efficient deal structures   
  • Providing advice on shareholding structures in a cross-border context to obtain benefits from applicable tax treaties   
  • Optimising flow of funds to minimise tax leakages   
  • Considering transfer pricing aspects of intra-group transactions
  • Supporting the deal through the implementation stage with a focus on strategic priorities

Debt restructuring

  • Identifying and planning the tax consequences arising in debt modifications, debt cancellations, and negotiated settlements   
  • Assisting clients in negotiating terms of debt modification agreements
  • Advising on mitigating potential limitations on the utilisation of tax losses and other valuable tax attributes   
  • Analysing the tax effects of intercompany reorganisations

Tax-related post-acquisition integration

  • Analysing the tax implications from business processes, structural changes, and human capital organisations   
  • Evaluating alternative approaches to obtain tax efficiencies   
  • Making use of available tax incentives   
  • Implementing a group’s transfer pricing arrangements   
  • Introducing new processes and controls to mitigate tax exposure

Partnerships and joint ventures tax advisory services

  • Assisting businesses in setting up their relations with partners and     contractors in a tax efficient way   
  • Providing advice on the calculation of tax bases, including attribution of revenue and cost allocations

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