Due Diligence is a process of investigating the existence of debts or pending issues of tax, labor nature and other contingencies, to confirm the data made available to potential buyers or investors.
This process presents clear variations depending on the nature of the business and the size of the company, but basically refers to financial, accounting and tax matters, in addition to corporate, labor, environmental, real estate, intellectual and technological property issues.
However, it is a task that identifies accounting and legal assets and liabilities and assesses them at market value, in order to subsidize merger, consolidation, purchase and joint venture operations, allowing greater security in negotiations between buyers, shareholders or investors.
In this process, technical knowledge and ethical performance with guaranteed staff impartiality and confidentiality are essential for the operation to be successful.
The audit can be directed to the preparation of the company with a future sales process in mind, allowing the adoption of corrective measures, adding value to the company.
The result of the due diligence process is usually a report that outlines the general status of the subject matter of the transaction, confirms its values and identifies its contingencies.
In cases of consolidation, merger and spin-off, or even for dissenting or joining partners, closing activities or other specific operations, the accounting appraisal report is required to certify the accuracy of the assets, rights and obligations provided for in the net accounting assets consisting of all components of the balance sheet or in the net accounting collection consisting of certain assets and liabilities particularly selected by the management of the entity requesting the appraisal report.
Our experience in spin-off, merger and consolidation operation processes allows us to act from the planning of corporate reorganizations to the effective registration of changes.
Tax Review aims to validate tax practices, special procedures, in order to minimize tax risks and contingencies.
With a view to optimizing tax routines and taking advantage of any benefits granted by law, we offer the following products
Preventive Tax Review
Procedures applied in order to identify possible risks, or even opportunities, through study and classification of the industry, applicable benefits, current law and review of tax operations for a given period.
This type of Review is most effective when performed together with Accounting Audit, in order to cover all ancillary obligations which are audited from time to time by the Tax Authorities.
The suggested period for applying this modality comprises the last five years of the company’s activity, which can be understood or reduced, according to the needs of each client.
Special Tax Review – Predetermined scope
Procedure where certain periods will be previously agreed, for example, the last exercise of activity, for which all possible inspections will be carried out taking into account the availability of documentation for the execution of the works. This type of review aims to anticipate possible risks not yet questioned by the Tax Authorities.
Tax Planning and Recovery of Taxes and Tax Liabilities
Tax profile study for companies that are establishing themselves in the country or review of the tax profile for companies already established, in order to identify possible legal opportunities for reducing the tax burden, recovering overpaid taxes or identifying possible tax liabilities for some activities.
Legal Wording Review
It comprises the analysis of the articles of incorporation, registrations, certificates, licenses and ancillary obligations.
The work in this area will include specific inspections related to the company’s personnel department.
The procedures adopted in the inspections include the review of internal controls and the execution of substantive tests which, by their nature, reveal the practical implementation of legal and administrative procedures.
The evaluations carried out in the records, as well as the investigations carried out in the workplace, make it possible to survey possible illegal acts and/or exposure situations.
The following items are included in our scope of standard works:
Transfer Pricing is the tax mechanism that aims to control international transfers between related persons, applicable to goods, services, rights or interest.
This control basically aims to reduce or give the inspection bodies control of operations that can be characterized as overpriced (imports) or under-invoiced (exports).
The calculation of Transfer Pricing is based on methods defined and described in the tax law, indicating the deductibility in the calculation of the Taxable Income and CSLL the amount that does not exceed the price determined by one of the methods.
Our work consists of:
a) Identification of the obligation to determine transfer pricing
Application of the relevant law to identify the actual obligation in determining and evidencing transfer pricing.
b) Identification of methods that can be used
Analysis, based on the methods described in the relevant law, and, based on the information made available by the Company’s management, of the methods for determining the possible pricing parameter.
c) Determination of the parameter price and comparison with the practiced price
Elaboration of electronic spreadsheets, indicating the calculated parameter prices, comparing them with the prices practiced and indicating, when necessary, the adjustments in the tax calculations (IRPJ and CSLL), of the respective years.