The Tax Risks Identification In Merger And Acquisition In China

Since the first case of Merge&Acquisition in1984, the M&A market in China hasbecome booming from the starting. As the regulator of market stability and the rule maker, outgovernment has also strengthened the regulation and monitoring. The announcement of theproblem of the income-tax treatment for the share transfer of foreign-invested enterprises andforeign enterprises from the State Administration of Taxation opened the curtain of the stagethat SAT began to participated in regulating the M&A market. The evolution of these taxationregulations changes the tax environment of M&A market. This makes it becomes more andmore important for enterprises to consider the tax risk in M&A.This article has concluded the basic M&A process that based on the case of the mergerbetween SDB and Ping An Bank in2012. It combined the tax regulations with the process toget to the conclusion of tax risks identification. This article aims at reminding the managersand shareholders that they should pay attention to the tax risks during M&A, and giving themsome suggestions on identifying the tax risk.This article can be divided into2parts. The first part is CASE, which introduces thebackground and the basic information of the cases. The second part is CASE STUDY. Thispart includes the Introduction, The related principles, Tax regulations, Tax risk identificationduring the M&A process and Conclusion.This article applies the tax identification theory to the real cases to explain the process ofidentification from a more realistic aspect.