Buying or Selling a Business: Pillar Two Questions for Due Diligence

Map the seller group, target entities and intended buyer structure. Record acquisition dates, fiscal years and the consolidation treatment that needs technical review. The scope and calculation consequences of mergers, acquisitions and disposals require analysis under the relevant rules; do not apply a simple ownership percentage to every historical amount. Ask which entities and periods the target’s previous advice actually covered. Separate pre-completion obligations from the buyer’s future process. A tax due-diligence scope that mentions ordinary income tax but says nothing about minimum-tax data can leave an important reporting gap even before a quantified liability is found.

Request scope analyses, entity charts, relevant calculations, election history, filings, receipts and unresolved authority correspondence. In a fictional acquisition, the target provides a zero top-up estimate but cannot produce the evidence for the safe harbour used. The buyer should identify the missing condition and potential affected periods, rather than accepting zero as a completed diligence finding. Check whether the source accounts and tax adjustments can be reconstructed after separation from the seller’s systems. Data access and cooperation may be as important to a workable handover as the current estimate of tax.

Identify possible tax, penalties, interest and compliance costs under the relevant jurisdictions. Distinguish established liabilities from unquantified issues and assumptions requiring local advice. Ask transaction counsel to address appropriate warranties, indemnities, information access and cooperation provisions; this article does not prescribe a clause or promise recovery. A private agreement can allocate economic costs between parties without changing which entity owes the authority. Check how subsequent tax changes or corrections will be communicated, who controls the response and how evidence will be retained. Escalate material uncertainty before the purchase-price or protection discussion is treated as final.

Allocate responsibility for inherited deadlines, new appointments, data transfer and integration of the target into the buyer’s process. Keep the seller’s contacts and agreed cooperation arrangements available to the local teams. Obtain a dated handover rather than assuming every item is included in a virtual data room download. Bring us the structure, proposed timetable and existing diligence scope if minimum-tax issues are unclear. We can help organise the questions with tax and transaction advisers. The aim is a decision-ready assessment and practical continuity after completion, not a guarantee that a clean historical return eliminates future exposure.