Healthcare & Pharmaceuticals

Client

An international company involved in clinical researches.

Client Challenge

The client asked KPMG for the advice on tax structuring of transactions (activities) with the companies (both residents and non-residents of Ukraine) that support clinical researches.

KPMG Response

KPMG team analyzed the proposed business model for the applicable tax regime and possible tax risks. The client received the recommendations on mitigation of revealed tax risks considering the recent court practice and the position of the tax authorities.

The support of KPMG allowed the client to mitigate tax risks prior implementation of the contemplated activities.

Why KPMG

The main priority of KPMG is to achieve practical results. This is the reason why the analyses and the recommendations of KPMG specialists allowed the client to avoid tax risks and remain compliant with the tax legislation.

Client

An international manufacturer of pharmaceuticals.

Client Challenge

The client asked KPMG for the analyses of the current business model in Ukraine and for the analyses/comparison of possible options to carry out business activities on the territory of Ukraine with the involvement of the subsidiary company and/or representative office (either commercial or non-commercial). Also the client was interested in possible options to finance the expenses (administration, marketing, advertising etc.).

KPMG Response

KPMG specialists analyzed tax implications and risks arising from the current business model of the Client and under models proposed by KPMG.

The client remained satisfied with the delivered services and took into consideration the conclusions of KPMG while changing the business model and financing the expenses.

Why KPMG

The quality of services met client’s expectations due to considerable experience of KPMG in Ukraine in tax structuring and planning and, especially, due to the experience of engagement in the projects with the largest Ukrainian and international healthcare & pharmaceutical companies.

Client

An international manufacturer of pharmaceuticals.

Client Challenge

The сlient asked KPMG for the diagnostics (tax audit) of the accounting accurateness and the correctness of the tax liabilities payment in order to reveal tax risks and/or possibilities for tax economy.

KPMG Response

KPMG specialists analyzed the compliance with the requirements to the primary documents and analyzed whether the tax liabilities were accrued correctly.

As a result of tax diagnostics (tax audit) the client received the impartial evaluation on the company’s compliance with the tax legislation as well as the analyses on the revealed tax risks and possibilities for tax economy (including KPMG recommendations on required actions for tax risks mitigation/tax economy).

Why KPMG

The approach of KPMG to achieve practical results and the high qualification of the KPMG specialists that are experts in the healthcare & pharmaceuticals industry are the reasons why the clients highly appreciate KPMG services quality.

Client

Leading international healthcare and diagnostic services provider

Client Challenge

The сlient has approached KPMG Deal Advisory team in respect of the envisaged acquisition of the Ukrainian company. The сlient has requested financial and tax due diligence to be conducted by KPMG in order to identify the key risks associated with the acquisition of the Ukrainian company.

KPMG Response

• KPMG has carried out financial and tax due diligence and identified a number of risk areas, which were taken into consideration by the сlient when building financial model and negotiating on the price of the deal, as well as on representations, warranties and indemnities from the seller.
• KPMG has conducted a number of interviews with the target’s management. We have identified that the reliability of financial statements was low, as management did not prepare financial statements in accordance to IFRS. We have therefore proposed a number of adjustments to reported EBITDA in order to reflect the true and fair view of the target’s operations. 
• The target was involved in a number of tax optimization schemes and transaction with related parties. KPMG has estimated a volume of such transactions and has proposed a number of normalisation adjustment to reported EBITDA, net debt and working capital.
• KPMG has prepared tax profile of the company, including identified and estimated tax risks.
  
  

Why KPMG

KPMG Deal Advisory practice in Ukraine has knowledge of specific sector related issues. The key team members had recent experience in a number of healthcare engagements – financial and tax due diligence of a network of diagnostic centers in Ukraine, buy-side due diligence of one of the largest providers of specialist behavioural health services in the UK, buy-side due diligence of pharmaceutical company in Ukraine, tax due diligence of several Ukrainian radiology centres.

KPMG has provided recommendations to the сlient in respect of each identified risk area. Such recommendations were provided in order to facilities the process of preparing the Sale & Purchase Agreement with the seller.