BDO could help you in Tax Due Diligence specifically in the case of corporate merger & acquisition.

1. Tax Due Diligence for
Merger and Acquisition (M&A)
BDO Indonesia

2. 2
WHY M&A?
• Succession planning
• Smaller firms are struggling
with investments in
methodologies and tools
• Clients are increasingly going
cross-border
• “Commoditization” of certain
services (need to increase
breadth of offering)
• War for talent
Current trends and market dynamics are paving the way for consolidation
within industries.
• Size lifts profitability
• Gain scale & enables
efficiencies
• Strengthen market position
and brand
• Get access to attractive
market segments or
strengthens service lines
• Access to an international
network
• Attract key talent
1. Strategic considerations
2. Managing the M&A process
3. How BDO Indonesia can
help
DRIVERS MOTIVES OUTLINE

3. 3
1.Strategic
Considerations

4. 4
THE ”MAKE-BUY” DILEMMA
OFTEN NOT EITHER OR
• Strengthens position
• Speed
• Falling prices amongst
firms
• Increased regulation and
fee pressure
• Enables organic growth
• Deal complexity
• Candidate unavailability
• Integration complexity
• Resistance from Target
MERGER/
ACQUISITION
PRO
CON
• Easier cultural fit
• Simplicity
• Slow pace
• Difficult in low-growth
markets
• Difficult if sub-scale size
ORGANIC
GROWTH

5. 5
2.Managing the M&A
due diligence process
– a seamless approach

6. 6
MANAGING THE M&A PROCESS
OUR GUIDING PRINCIPLES
Promote “one-firm”
approach – between
legal, financial and tax
due diligence teams
Collaboration between
teams to prepare an
integrated report for
stakeholders
Consider the interest
of all stakeholders and
engage in frequent
communication/
updates with both the
Target and the
stakeholders
Instill rigor and
discipline in the
process
1 2 3 4
Our four guiding principles allow us to ensure our clients experience a seamless
due diligence process

7. 7
3.How BDO
can help?

8. 8
PROCESS
Preliminary
diligence/
evaluation
Tax due
diligence
review and
reporting
Closing
Preliminary diligence/detailed discussions:
• Once a certain level of interest has been reached between an acquiring entity and a target, a
Non-Disclosure Agreement (NDA) should be executed to allow for a more detailed discussion
and comprehensive sharing of information.
• At this point, it would be appropriate to share with the target a preliminary information
request list which would include a list of things BDO Indonesia would need in order to
complete a preliminary review of a possible target as well as prepare a possible deal structure
scenario.
• Preliminary diligence will include, among other things, an initial assessment of risk and
identification of financial opportunities (if any) and planning.
• Depending on size and assessed need, meet with the target to revisit the key tasks to be
performed in the short-term.
• Part of this process will be ensuring that all required information has been received.

9. 9
PROCESS
Preliminary
diligence/
evaluation
Tax due
diligence
review and
reporting
Closing
Tax due diligence review and reporting:
• Review and assess Target’s financial statements including notes to the accounts, with a view
of identifying any material tax issues that may affect the Target during the Covered Periods.
The common key tax areas are: corporate income tax, withholding tax, final withholding tax
Article 4(2), value added tax and employee income tax. Our review will also include
comment on the rationale of the substance of the transaction and/or business structure.
• Our review include performing reconciliation at a high-level to determine the level of tax
compliance of the Target between what is recorded in the books and tax objects that have
been reported. Depending on the development of the finding, the review may be extended
to a more detail level to cover area(s) that based on the initial review might have
substantial tax issues and exposures. Any discrepancy will open a discussion with the
Target’s management team before it is considered a liability for the acquiring entity.
• Weekly update can be arranged and agreed upon if requested. A normal timeframe to issue
a first draft report is two weeks since complete data required is received.

10. 10
PROCESS
Preliminary
diligence/
evaluation
Tax due
diligence
review and
reporting
Closing
Closing:
• Upon completion of our analysis, we will release a tax due diligence report that outlines the issues
we found during the fieldwork as well as the corresponding tax exposures in regard to the
contemplated corporate action (e.g., acquisition). We may also provide you with our comments on
the proposed transaction and/or business structure that you contemplate, if requested. You may
decide to proceed based on the result of our analysis and recommendation.
• When needed, the process may continue with a tax structuring effort to ensure an optimal
business integration is achieved. If this is of interest, BDO Indonesia can help in the following areas:
• Providing tax advisory in relation to the group’s structure and/or on-going and/or future
transactions;
• Assisting with review of transaction policy and standard operating procedures to ensure the Target
(or group) maintains a high level of tax compliance in upcoming years; and
• Providing training to new recruits and/or existing staffs for tax recording and reporting purposes.

11. For more information please contact:
BDO INDONESIA
Michelle Mianova (mmianova@bdo.co.id)
PT BDO Bisnis Solusi Indonesia
Prudential Tower 16th-18th Floor
Jl. Jenderal Sudirman, Kav. 79
Jakarta 12910, INDONESIA
Tel : +62-21 5795 7300
Fax : +62-21 5795 7301
www.bdo.co.id
About BDO
BDO is the one of the largest global network of public accounting,
tax and advisory firms which perform professional services.
These firms have representation in 154 territories, with 64,300
people working out of over 1,400 offices worldwide.
BDO member firm in Indonesia dated back to 1992 when
Drs Richard B Tanubrata was the Managing Partner of
KAP Drs RB Tanubrata, a public accountant firm that
was founded in 1979.