Due diligence of the target company from a tax point of view
Tax due diligence is intended mainly for investors who are planning to acquire a company, part of it or to merge with another entity. The due diligence is carried out with the consent of and in cooperation with the reviewed entity. The primary focus of this tax due diligence is to identify potential tax risks related to tax compliance.
Since the acquisition of another company is a complex matter and the potential investor does not know all the details of the company's activities, tax due diligence provides the investor with insight into the company and its tax situation.
Tax due diligence – lower transaction risk
Tax due diligence is an audit aimed, among other things, at verifying the correctness of a company's settlements. This examination reveals a number of risks and allows them to be minimised. During tax due diligence, it is possible, inter alia, to identify irregularities concerning the application of tax rates, the performance of intra-Community supplies of goods, as well as in the transfer pricing documentation. Moreover, the audit makes it possible to check whether the entity is subject to tax or customs inspections.
A well-planned and conducted tax due diligence determines the success of a transaction. It is an invaluable tool when it comes to making investment decisions, both in the short and long term. In addition, tax due diligence will allow for the correction of tax irregularities and help avoid unforeseen sanctions by the tax authorities.
Tax due diligence in the Czech Republic: Learn how we can help
We offer comprehensive support as part of tax due diligence. We are ready to provide you with advisory and assistance during the entire process of acquisition or implementation of the transaction. As part of the service offer, we will, among other things:
- identify the potential tax risks of the company being audited,
- prepare a full audit report,
- prepare a red flag report,
- estimate the amount of tax liabilities that may be charged by the tax authority.
Our service is to assist you in the negotiation process with the seller and to ensure that you identify tax risks that may also arise after the sale process.
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In justified cases, the tax base for a particular type of goods may be determined based on its minimum actual value.
Any claim for a refund of VAT paid in other EU Member States during 2025 must be submitted electronically no later than 30 September 2026.
As of 1 July 2026, late payment interest is 11.75% p.a. It accrues from day 4 after the due date and is based on the CNB repo rate +8 pp.
In justified cases, the tax base for a particular type of goods may be determined based on its minimum actual value.
Any claim for a refund of VAT paid in other EU Member States during 2025 must be submitted electronically no later than 30 September 2026.
As of 1 July 2026, late payment interest is 11.75% p.a. It accrues from day 4 after the due date and is based on the CNB repo rate +8 pp.