COVID-19 #16 Change of control – impact on tax attributes
A staggering US$2,500bn. That’s the estimated ‘dry powder’ currently held by private equity firms at a global level. Although a lot of that money is likely to be invested in businesses that are coping (reasonably) well with the ongoing crisis, troubled sectors may nonetheless see a greater deal of activity as they may present opportunities
COVID-19 #15 Management Participation Schemes under water
The fact that Governments are gradually defining their exit strategy, does unfortunately not imply that managers are already seeing the exit horizon they were hoping for when they invested in the group. As we may have left the path of a buoyant M&A market, a lot of managers may be in dire straits as their
COVID-19 #14 Impact of decreasing EBITDA on interest deductibility
You don’t need a crystal ball to predict that a lot of companies will be confronted with a lower EBITDA than projected. Especially for highly leveraged businesses, this may bring some additional challenges. Indeed, by transposing the interest limitation rules embedded in the EU Anti-Tax Avoidance Directive (‘ATAD I’) in national law, Belgian taxpayers may
COVID-19 #13 Liquidation of negative net equity companies
In many groups, the current year financial performance will not meet the budget set at the start of the financial year. The current crisis is immeasurably affecting the economic landscape. When companies are no longer capable of funding their own operations, shareholders may be called to provide financial support. In circumstances like these, it is
COVID-19 #12 Corporate simplification: transitioning into a cost-efficient, substance-based and sustainable corporate structure
The current economic context highlights the need for multinational groups to realise savings, optimise cash movements within the group, rationalise management structures and/or reorganise their supply chain. Globalisation and also single sourcing of products (often only from China) made companies vulnerable for a disruption of their supply chain as has happened with many by this
COVID-19 #11 Group contribution for companies in temporary financial distress
As the effects of the current crisis reverberate throughout the global economy, it is obvious that not every business or geography has been hit equally. The same holds true for companies within a group – and even for business units within a company. Absent a tax loss carry-back system in Belgian tax law (except for
COVID-19 #10 Cash tax forecasting
The current pandemic not only puts great pressure on our healthcare system, it is also paralysing the economy. As businesses are suffering, cash flow management has become a top priority in many organisations. In this respect, cash tax forecasting can support groups in optimising their available cash. Item #10: Cash tax forecasting At macroeconomic level,
COVID-19 #9 Factoring in times of corona
In these turbulent times, issues with unpaid invoices or late payment may not only cause valuable time to be spent on accounts receivable management, but equally cause working capital levels to skyrocket. In order to mitigate the financial impediment of no (or late) payment and to alleviate their financial departments from additional administration, taxpayers may
