The Case Study On Tax Planning Methods Of Each Link In The Process Of M&A In China

It has been more than 100 years since merger and reorganization activities originated in the west. And it has drawn greater attention because enterprises can rapidly expand their market scale and enhance their core competence effectively. If we look back into the past 20 years, we will find the M&A deals are very active in China’s capital market. The applications of M&A cover all walks of life. The forms of M&A are also varied. This phenomenon embodies vitality stimulated by the market and the development of M&A activities in China.It is not difficult to discover the cause of the merger and acquisition is varied if we analyze the trading data statistics getting from Shenzhen Stock Exchange and Shanghai Stock Exchange. Some companies aim to do the kind of deals, such as backdoor listing. Some companies hope to strengthen their business through M&A. the others may anticipate to achieve a particular business or industry chain and reduce competition within the group.But the ultimate goal of M&A is to enhance the management capability of the enterprise and to achieve maximum economic efficiency of enterprises.Considering the process of merger and acquisition, we found that M&A is extremely complicated. The cost of the process has an import impact on the success of M&A and the production and operation of the enterprise after the merger. As an important part of the acquisition cost, the tax cost should not be ignored in the process of mergers and acquisitions. So the tax planning of M&A must be taken into consideration.This article analyzed the real deal statistics released by the China securities regulatory commission. Analysis shows there is a negative correlation between the tax cost and business performance occurred in the process of M&A. So it is very import to discuss the tax planning in the process of M&A by case.Next this paper studies the tax planning methods by case analysis in every link of M&A, including the choice of target enterprise, the links of investment, the links of financing, the links of integration phase after the completion of M&A, the links of capital gain. The article summarizes all feasible tax planning schemes through the way of case study and theoretical analysis hoping to be able to cause the attention on M&A tax planning of enterprises. The ultimate goal is to make full use of tax leverage and reduce costs and improve enterprise core competitiveness.At the end the paper selected major asset replacement deals as an integrated case. Then the paper analyzed different tax planning scheme and solutions of each link to the real deal. By comparing the different tax planning scheme we can see the influence of the tax planning in M&A process.Then the paper has given some suggestions in the process of the implementation of tax planning.