Tax Planning In Mergers & Acquisitions

M & A refer to mergers and acquisitions. Mergers mean juristic action that more businesses or enterprises incorporated a company through legal procedures, including absorbed mergers and new-founded mergers. Acquisitions mainly refer to the acquisition of the holding company to obtain the right to purchase. Tax planning is the most important component of a business management strategy. In compliance with national tax policies and regulations premise to reduce costs and increase net profit for the purpose of preferential policies, policy errors and flexible regulations, and other factors, the enterprises take important way to allow them to delay or alleviate tax burden so as to enhance economic efficiency of enterprises. Merger is an asset reorganization, it could change the organizational forms and internal equity business relations. M & A have the inextricable link with taxation. In company mergers and acquisitions, tax issue is a very complex task. Through tax planning, enterprises can optimize the tax-related activities in mergers and acquisitions so as to reduce tax costs and increase revenue financial interests to maximize the financial value.The paper studied the present state of M & A and tax planning of the western countries and gave an answers of five tax-related questions in M & A, that is, shareholders with holding tax, the influence of tax attributes, the target company level tax impact, the target company assets tax base changes, mergers and acquisitions leverage effect. On the target company and the merger company's specific tax planning, the paper expatiated on several aspects, primarily from corporate tax, capital gains tax, other taxes and the closed company.In the main part of the dissertation, firstly, as the start from the trait of enterprises in China, the tax planning in the tache of M & A was analyzed by the three funding modalities for a detailed exposition, including the choice of target company, the way of investing and financing, giving the corresponding tax planning methods and ideas. Secondly, tax planning for multinational enterprises were summarized in the corresponding analysis that merger not only avoided certain circumstances subject tocapital tax and local tax, but also enjoyed tax rebate and tax concessions provided by the country of group and corporation purchased registering with the host country. Thirdly, the paper still explored and summed up strategies and techniques of tax planning in financial accounting, the transfer tax involved in M & A, the overall asset transfer, the overall asset replacement, stock transfer and other activities. Research shows that the taxation is very important in the consequences of transactions in M & A; it will directly affect the company's financial returns and business value in M & A activities. Through legitimate and reasonable way in mergers and acquisitions activities, the enterprises mitigate their own tax burden and achieve maximum tax benefits, and ultimately the goal of maximizing the value of the enterprise.