Anyone acquiring a company or a stake in Greece also takes over its tax history. Tax liabilities from past years generally remain with the company – and are borne economically by the buyer after closing. A tax due diligence brings these risks to light before you sign, so that they can be reflected in the purchase price, the purchase agreement or the structure of the transaction.
What we review
- Tax status: which tax years are final and which can still be audited by the Greek tax authorities (unaudited years within the limitation period)
- Corporate income tax: tax returns, tax adjustments and the deductibility of expenses
- Indirect and withholding taxes: VAT, stamp duty, the Digital Transaction Fee for relevant transactions from 1 December 2024, and other indirect taxes, as well as withholding taxes on salaries, fees and dividends
- Transfer pricing: intra-group transactions and the required documentation
- Tax losses: losses carried forward and whether they can still be used after a change of ownership
- Tax audits: results of previous tax audits, open assessments and pending disputes with the tax authorities
- Tax certificates: annual tax compliance reports issued by statutory auditors, where available
- Incentives: tax incentives and subsidies received and the conditions attached to them
What you receive
- a clear report in English, German or Greek listing the identified tax risks, quantified wherever possible
- recommendations for the purchase agreement: tax warranties and indemnities, escrow or purchase price adjustments
- advice on the tax implications of the transaction structure (share deal or asset deal)
For sellers: vendor tax due diligence
If you are preparing the sale of your company, a vendor tax due diligence identifies weaknesses early. You gain time to remedy them and enter negotiations with reliable figures.
Why Sigalas & Partners
As certified public accountants we combine audit and tax consultancy under one roof. Our work draws on ongoing tax engagements in Greece; we work directly in Greek, German and English and can combine the tax due diligence with a financial due diligence if required.
Frequently asked questions
Which periods does a tax due diligence cover?
As a rule, all tax years that remain open to audit by the Greek tax administration. Under the Tax Procedure Code (Law 5104/2024, Art. 37), the general limitation period is five years from the end of the year in which the filing deadline falls; it extends to ten years where no return was filed or new information becomes available. Years covered by an unqualified annual tax certificate from a statutory auditor generally carry a lower risk, but may still be selected for audit.
How is the scope defined?
The scope is agreed with the client at the outset and follows a risk-based approach: it concentrates on material tax positions, the target's business model and the areas that the tax administration currently audits most intensively. A limited red-flag review is possible in an early phase of the transaction.
How are identified tax risks addressed in the transaction?
Depending on their nature and amount, findings are reflected in the purchase price, in specific tax indemnities and tax warranties in the purchase agreement, in escrow or retention arrangements, or in warranty and indemnity insurance. Where a risk can be remedied before closing, for example through amended returns, this is included in the recommendations.
What are the differences between a share deal and an asset deal?
In a share deal the target retains its entire tax history, so historical exposures remain with the company being acquired. In an asset deal historical tax risks generally stay with the seller, although certain liabilities may pass to the acquirer by operation of law, and the transfer itself has its own tax consequences. The findings of the tax due diligence inform the choice of transaction structure.