At the request of a Big 4 audit firm based outside Cyprus, we proceeded with a direct and indirect tax due diligence on 3 Cyprus companies’ activities involved with holding and financing activities.
The scope of our work was, among others, to comment on the status of tax/VAT filings and payment of taxes, to analyze the VAT treatment adopted, to analyze the companies’ financial statements for the years 2018-2020 to identify any significant tax risks, to summarize and comment on whether the companies had material tax attributes such as tax losses and capital losses and comment on their availability for use in future periods including restrictions arising on a change of ownership, to comment on disclosed material intra-group or other non-arm’s length trading arrangements, to comment on the tax treatment of loan interest expense attributed to the acquisition of investments and analyze possible tax risks that might arise in the future.