Preparing to sell your business? Start with a seller’s tax review

A seller’s tax review before investor discussions can clarify the history and identify matters needing explanation. Its purpose is to prepare consistent information and a working plan, without promising a transaction free of risk.

Change perspective before the questions begin

Management understands the business through everyday decisions. A buyer sees documents, figures and responses within a limited period. The difference between those perspectives can create misunderstandings even when transactions have an explanation. A seller’s tax review aims to identify these points before the investor’s due diligence begins.

For example, in a hypothetical situation, a tax liability balance differs from the amount in the latest return because of a payment, correction or reporting-date difference. A dated reconciliation supported by evidence explains the difference better than a statement that “everything is fine”.

Turn findings into verifiable actions

The Romanian Accounting Law provides the framework for accounting records and supporting documents. When preparing a transaction, connect those records to returns, payments and explanations of tax treatments. Depending on the business, the review may cover related-party transactions, personnel, VAT, assets and disputed matters.

Each finding should state what is known, what remains uncertain and which document could clarify the position. If an error is identified, assess correction options and their consequences under the Fiscal Procedure Code. Preparing for a sale does not justify retrospectively changing facts or concealing relevant information.

Separate missing evidence from a difference in interpretation and from a liability already assessed. These situations call for different actions. An estimate should include its assumptions and limitations so that the transaction team understands what might change the conclusion.

A checklist for a consistent data room

• Define the entities, periods and areas covered by the review.
• Prepare reconciliations between accounting records, returns and payments.
• Centralise relevant audits, appeals and communications with authorities.
• Maintain a findings register with a responsible person and current status.
• Check document indexing, versions and access within the data room.
• Update information through the relevant transaction milestones.

A report prepared for the seller does not replace the buyer’s review or guarantee agreement with every conclusion. It can make discussions more precise and help tax and legal teams address pricing, contractual protections and post-completion actions separately. It also gives the seller a consistent record of which questions have been resolved and which remain open.

If you are preparing a sale, an initial discussion can start with the group structure, expected timetable and list of information already available. The review can then be scoped around the transaction’s actual needs.

This article provides general information, not individual advice. Review scope, potential corrections and contractual implications must be determined by reference to the specific circumstances.