A Study On Profits Of Income Tax In Mergers And Acquisitions

The scale of Mergers and Acquisitions(M&A)is expanding in our country.The Mergers and Acquisitions is not only need of enterprise development,but also the important part of our country's development.Now the domestic enterprise pay more attention to complementary to achieve the expected synergy.This dissertation analyze the Mergers and Acquisitions from the perspective of getting the profits of income tax,and then know the approaches of getting tax revenue in Mergers and Acquisitions.This dissertation gives us some advice with tax administration based on the research before.The first part of this dissertation tells the decision-making theory of Mergers and Acquisitions;the antecedence of M&A;the synergy theory of M&A.The following analysis is based on these theories.The second part tells us the measure of the profits of income tax is the variation of the Effective tax rate(ETR)based on the theory before and the income tax system of our country.And the introduces three factors to get profits of income tax including the evaluation of the tax condition of the target before M&A;rational choice of M&A types and model in designing the transaction;and better integration of the tax resources.The third part analyzes the first factor to get profits of income tax firstly.W e find that getting the profits of income tax is one of the M&A motives,and the motives present as tax shields of depreciation and interest;tax deduction and cre dit of tax preference;asymmetry between income and loss recover.Based on thes e motives this dissertation tells that the first factor to get profits of income tax i s evaluating the tax resources of the target such as the depreciation and the tax deduction,etc.The next is an empirical study on the profits of income tax with d ata of Chinese listed companies as a sample.Through this study we find that th e company has got more profits of income tax in M&A.We find some factors of getting the profits of income tax namely change in business size,change in fix ed assets ratio,choice of type,change in ratio of liability with interests.Finally the dissertation advocates the following measures to get profits of in come tax:comprehensive tax management all through the preparation,execution,and integration of M&A;full evaluation of the tax condition of the target business in deciding on the target;rational choice of M&A types and modes in decidi ng on the transaction,including giving full play to non-cash payment and choosi ng suitable tax treatment,and better integration of the tax resources in deciding on the integration,including adjusting ratio of fixed assets and determining finan cial leverage suitable to the businesses involved.