Research On Tax Treatment Of Mergers And Acquisitions

Mergers and acquisitions('M&A')is a crucial way for enterprises to seek strategic transformation and scale expansion.It is also a strategic choice and important task that enterprises face in the course of development.M&A transactions include a wide range of tax-related problems,and the efficiency of solving such problems can largely affect the M&A process.This article aims to discuss and study issues about tax treatments in M&A transactions and specific tax treatment applications in our country.Besides,the article offers proposals to improve defects of current M&A tax treatments.Firstly,the article analyzes the M&A principles and introduces the following points of view:1)A sustainable gain is the cornerstone of the tax system in M&A transactions;2)anti-tax avoidance rules are important considerations in the design of the tax regime for M&A transactions.Secondly,the article introduces the applicable experiences of tax principles in U.S.M&A transactions and analyzes the Chinese cases.The article expresses a real-world case study and multiple significant tax related M&A research topics.After analyzing special tax treatment conditions one by one,the article points out that shareholding of a company in its controlling subsidiary should be considered as a non-eligible equity payment.In addition,the article demonstrates that natural person shareholders and partnership shareholders should also apply special tax treatment conditions through indicating differences in tax policies and their influence on various shareholders.Moreover,the article illustrates that the fundamental accounting recognition rules of special tax treatment should be changed in order to eliminate double taxation problems by analyzing effects of differences between general tax treatment and special tax treatment.The article provides targeted suggestions on tax treatments that are applicable in M&A transactions such as cross-step transactions and multi-step transactions.Furthermore,the article analyzes all kinds of tax policies related to outbound investments of non-monetary assets and puts forward a number of proposals to improve the policies.