Healthcare & Pharmaceuticals

Client

An international company involved in clinical research.

Client Challenge

The client asked KPMG for advice on tax structuring of its transactions with both resident and non-resident companies supporting clinical research.

KPMG Response

The KPMG team analysed the client’s proposed business model for the applicable tax regimes and presented potential tax risks. The client received these mitigation recommendations, taking into consideration recent court practice and the relevant position of the relevant local tax authorities in each jurisdiction.

KPMG’s support was instrumental in enabling the client to mitigate tax risks prior to implementing their contemplated business activities and transactions.

Why KPMG

Our main priority at KPMG is to help our clients achieve practical results, providing analyses and recommendations to ensure our clients remain compliant with the relevant tax legislation and avoid tax risk.

Client

An international pharmaceuticals manufacturer.

Client Challenge

The client asked KPMG to analyse its current business model in Ukraine and conduct further analyses/comparisons with potential options for carrying out commercial and non-commercial business activities in Ukraine through the involvement of a subsidiary company and/or representative office. The client was also interested in potential options for financing relevant business expenses (administration, marketing, advertising, etc.)

KPMG Response

KPMG in Ukraine’s specialists analysed the tax implications and risks arising from the client’s current business model, as well as proposing and analysing various models for business structuring.

The client opted to follow its existing business model thanks to KPMG’s thorough comparative analysis of the options available.

Why KPMG

KPMG in Ukraine’s considerable experience in tax structuring and planning and, especially, our experience in engaging in similarly projects Ukriane’s largest local and international healthcare & pharmaceutical companies meant that the client could rely on our expert advice to make the right call.

Client

An international manufacturer of pharmaceuticals.

Client Challenge

The сlient requested that KPMG perform full diagnostics (i.e. a tax audit) of its accounting accurateness and the correctness of its tax liabilities payments in order to determine the existence of any potential tax risks and/or possible opportunities for tax economy.

KPMG Response

KPMG in Ukraine’s specialists analysed the client’s relevant primary documents for compliance with tax requirements and analysed whether their tax liabilities were accrued correctly.

As a result of our tax diagnostics and audit, the client received an impartial evaluation regarding its compliance with the relevant local tax legislation, as well as analyses regarding exploration of the various tax risks and tax economies we were able to determine (including KPMG recommendations on required actions for tax risk mitigation and tax economy).

Why KPMG

KPMG in Ukraine’s approach helped the client to achieve practical results, assured by the experience and highly qualified opinion from KPMG specialists in the healthcare & pharmaceuticals sector.

Client

A leading international healthcare and diagnostic services provider

Client Challenge

The сlient approached the KPMG Deal Advisory team regarding its envisaged acquisition of a Ukrainian company. The client requested that KPMG conduct financial and tax due diligence reporting in order to identify any key risks associated with acquiring the Ukrainian company.

KPMG Response

• KPMG carried out financial and tax due diligence reporting, identifying a number of risk areas which the client subsequently took into consideration in building its financial model and negotiating on the deal price, as well as incorporating our findings into its representations, warranties, and indemnities from the seller.
• KPMG conducted a number of interviews with the target company’s management, identifying that the reliability of relevant financial statements was low as such documents and financial statements had not been prepared in accordance with IFRS. As such, KPMG proposed a number of adjustments to the target’s reported EBITDA in order to reflect the true and fair view of the target’s operations.
• KPMG in Ukraine determined that the target company was involved in a number of tax optimisation schemes and transactions with related parties. As such, we estimated the volume of such transactions and proposed a number of normalisation adjustments to reported EBITDA, net debt, and working capital.
• KPMG prepared a tax profile of the target company, including all identified and estimated tax risks.

Why KPMG

KPMG in Ukraine’s Deal Advisory practice was able to utilise its knowledge of sector-specific issues in order to determine unique issues that may affect deals of this nature. Key team members brough extenstive experience from a number of healthcare engagements, providing financial and tax due diligence reporting across the network of Ukrainian diagnostic centres, as well as buy-side due diligence for one of the largest providers of specialist behavioural health services in the UK, buy-side due diligence of a Ukrainian pharmaceutical company, tax due diligence of several Ukrainian radiology centres.

KPMG provided recommendations to the сlient regarding each identified risk area, with such recommendations provided in order to best facilitate the process of preparing a Sale & Purchase Agreement (SPA) with the seller.