The Income Tax Planning Of Mergers And Acquisitions

From the beginning of the 1980 s, mergers and acquisitions in China has Shown a spurt of development trend. However, the tax issue during the acquisiton process has been ignored by a considerable part of the business, which even makes the mergers and acquisitions process fail. Mobile network game may lead the both sides of merger bear a huge income tax burden because of its asset-light, high premium rate and other characteristics.Based on the case as the highest premium rate of A-share market and GEM in the history of mergers and acquisitions in China, the article analyzes the income tax burden of both sides, and proposes improvements through comparing the payable income tax and deffered tax allowances of two proposals. The payable income tax of the merged party would be greatly reduced in the improved proposal but the improvement does not apply in all cases considering the specific circumstances of both sides.Finally, the article presents the following points: 1. merger process should have tax planning in advance to avoid termination of mergers and acquisitions. 2. Tax planning need to be analyzed specificly according to the circumstances of both merger parties. 3. "special tax treatment" will bring the enterprise great benefits only when it is used properly. 4 The tax burdern of mergers and acquisitions of China is still too heavy. there is a need to further improve the optimization of the existing tax system, and give full play to the role of tax incentives.