Tax consultants often encounter valuation issues in their line of work
Examples of this are:
- restructurings, mergers and spin-ofss of existing organisations
- Business transfers within the family circle
- participations by employees
These are situations in which assets change ownership between related parties. The tax authorities want to know whether the amounts used for such events are fair. In other words: Are they getting their piece of the cake? Would these valuations also apply if such transactions were to take place with a third, non-related party?
The assessment of the valuations by the tax authorities is usually carried out at a later date. The facts and circumstances may then be different from the assumptions on which the valuation was made. That is why it is important to make a sound and independent valuation prior to such situations. This provides clarity and can prevent lengthy discussions.