A corporate buyer was acquiring a business from a private equity seller. The buyer wanted protection against the risk it inherited secondary tax risk from the seller’s group.

The target was a member of a Dutch fiscal unity and the buyer was concerned that it may suffer unexpected tax charges due to the fact the target had been part of such fiscal unity (and its removal from the unity on completion).

We worked with the buyer and its tax advisors (a tax boutique law firm in the Netherlands) to agree a scope of diligence questions and work for the buyer’s advisor to carry out. The advisors then prepared their secondary tax risk diligence on that basis and after a very smooth and collaborative process we issued a tax policy for c.EUR 25m to the buyer to give it the comfort it needed and prevented the need for it to provide for such tax in its financial statements.