Group taxation

A group of companies is usually created by the extension or diversification of the activities of the group, but also through mergers and acquisitions. Most of the time the tax issues of a group of companies come out only when it becomes mandatory to restructure the group or to part from some divisions. Those issues are a brake to a potential sale and can lead to a deal breaker when the buyer is of the opinion that the tax risks are too high or too uncertain. From what we could learn from a recent past, if a tax issue needs six months to be solved, it is very possible that during this long period of time the economic environment dramatically changes in such a way that the markets could no longer be positive for a sale operation.

Such a nightmare scenario is the one that any businessman would like to avoid. Group taxation consists in a detailed analysis of the activities of each company, of their assets and liabilities, of their profit and loss accounts, of the projects attached to the companies and of the general philosophy of the group. It is necessary to analyze if by common mean (special tax status for example) or by others more sophisticated (restructuring, refinancing, etc.), substantial tax savings can be realized, now or later, especially in case of sale or split of a division. Any underlying tax risk of the group is analyzed, quantified and solutions to solve it are proposed and appropriate steps are taken in due time.

To group taxation belong also intercantonal tax issues, with the issues of intercantonal income and capital allocation, which can also lead to important tax savings.

Our approach is global, individual and sensitive, which allows us, based on our experience, to propose tailored solutions which go in the same direction as the economic decisions, which respect the tax laws and which lowers the global tax charge of the group and reduce the potential tax risks, in particular in case of sale of a division, management buy-out or enterprise transmittal.