Taxation

To quantify potential tax risks related to the purchase of a company

When you purchase a company, you become the owner of an entity that remains responsible for its debts and contingent liabilities, i.e., for all sums that could be assessed following a tax audit conducted by the government.

To avoid unpleasant surprises, our tax experts can analyze the financial information concerning the company you are considering to acquire to identify and quantify in monetary terms any potential tax risks. We can provide you with our due diligence observations verbally or in writing. Your financial partners could indeed require a written report.

Fiscal due diligence allows us to help you make decisions regarding the purchase of a company.

Based on the calculated risks, you shall have concrete arguments to negotiate the purchase price or purchasing terms, for example with a balance of sale.

To validate the potential presence of concealed tax debts

One of our tax experts shall review the financial information pertaining to the three years preceding your acquisition and answer questions such as the following:

  • Were the income tax returns correctly produced?
  • Are the claimed deductions in line with tax laws?
  • Are the sales tax amounts reasonable?
  • Does the company comply with the Act to promote workforce skills development and recognition (the “1% law”)?
  • Do the amounts appear accurate with respect to the T4 summaries and RL-1 slips, source deductions and CNESST deductions?

Fiscal due diligence is of critical importance when acquiring a company, to protect you from “concealed debts” and assessment notices claiming unpaid amounts against you.

Please contact us to be properly informed by one of our taxation CPAs of the tax risks related to the purchase of a company.

 

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Taxation team