The financial size of a Lithuanian subsidiary may not make it the largest entity in a potential target group, however this does not automatically translate into reduced tax exposure for the acquirer.
Although tax rate trends have generally been downward, there are a number of specific rules and practices which can give rise to material future tax exposure. The Lithuanian tax authorities, as anywhere else, have their own reading of a number of key tax provisions which often surprises potential investors. We work within the time given to us to bring unexpected matters up as early as possible.
We understand that in many cases deals need to be decided in a very short time frame and we are fully committed to providing a flexible team that works in parallel with your timetable and adapts to changes in circumstances. Needless to say, we place the utmost importance on ensuring confidentiality and we have stringent procedures with regard to conflicts of interest.
In addition, wherever the acquiring entity has sufficient time we use the pre-acquisition period to explore tax efficient alternatives to the proposed transaction, as well as tax optimization points for the target upon transition. We differentiate ourselves by our involvement in understanding the business background and the key points under negotiation. This enables us to bring proposals which are more realistic from a time perspective, and ones corresponding to your indicated balance between tax savings and tax risk.
Clearly any review needs to be performed by a team which has wide experience of transactions of a similar size and scope, which gives us an advantage over many other consulting firms on the Lithuanian market. Our tax department includes individuals specialized in a variety of taxes, with day-to-day experience of local practice and interpretation across a very wide range of industry-specific issues.