“CEE remains an attractive region for M&A, but investors need to look beyond headline tax rates. Financing rules, transfer pricing obligations and restrictions on the use of tax losses can all influence the value and structure of a transaction. Early tax due diligence, supported by local expertise, helps investors manage these risks while identifying opportunities that can improve deal economics.”
Elena Aubrée Partner
The report highlights the tax issues that can influence transaction value, financing and post-deal integration across Central and Eastern Europe.
Drawing on the experience of Forvis Mazars tax specialists across the region, the study identifies recurring risks and potential structuring opportunities that investors should consider from the earliest stages of a deal.
“There is no single tax structure that works across CEE. Investors need a country-by-country assessment that reflects the transaction, the target’s circumstances and the planned integration. Combining robust due diligence with early structuring analysis helps protect value and ensures that relevant incentives are not overlooked.”
Iosif Cozea Avocat Associé
Thin capitalisation and interest limitation rules can restrict the deductibility of financing costs, affecting cash flow and overall deal economics
Documentation requirements and enforcement practices vary across jurisdictions, increasing the importance of reviewing historical intercompany transactions during due diligence.
Changes in ownership or business activity can restrict the future use of a target company’s accumulated tax losses.
Investors increasingly need to demonstrate substance, beneficial ownership and a clear commercial rationale to access withholding tax reductions and other treaty benefits.
Goodwill amortisation, participation exemptions, group taxation, tax-neutral reorganisations and local investment incentives may improve after-tax returns when the relevant conditions are met.
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