Research On Tax Treatment Of VAM In Stock Acquisition

With the continuous development and improvement of China’s capital market,M&As are becoming more and more marketable,and VAM have gradually been widely used in China’s capital trading activities.However,there is still much controversy about the tax treatment of VAM in equity purchase,which needs to be clarified.It is hoped that the conclusion can help to clear the tax cost expectation of the trading parties to the stock acquisition activities,protect the private property rights of the taxpayers by law,and reduce the risk of law enforcement of the tax officers at the grass-roots level,so as to guarantee the loss of the state tax or the risk of being wantonly.First of all,this paper summarizes VAM,introduces different theories of the legal nature of VAM and makes comments.Then it discusses the common types of performance commitment compensation in the practice of VAM,and introduces the positive significance of VAM in the field of economics,and further clears the necessity of the study.Then this paper,starting with the qualitative theory of taxed transaction,combined with the identification of the nature of the legal relationship of the betting agreement,discussed and analyzed five common different tax handling viewpoints,such as "breach of contract gold","bond theory","donation theory","derivative financial tool theory","contract price adjustment theory" and so on.The guidance of the relevant tax principles,the extraterritorial introduction and reference of the field and the difference in the thinking of the tax and account processing have been further discussed,and after that,it is considered that in the practice of capital market in China,the nature of the legal relationship of VAM can generally be qualitatively defined as conditional agreement,contingent consideration of the agreement,that is,Performance commitment compensation can be used as a tax treatment idea in the view of "contract price adjustment".Compensation is regarded as the adjustment of the original transaction contract consideration.When the business performance of the object of transaction fails to reach the standard,the compensation obtained by the buyer shall be adjusted to reduce the tax base of the equity assets obtained.In the current period,the tax payable shall not be paid in the period of the taxable income and deferred tax.The price of the partial transaction returned by the Seller shall be reduced to the income of the initial share transfer of the transaction,or the right to apply for the tax refund.When the business performance of the enterprise reaches the standard,the compensation paid by the buyer should increase the tax base of the equity assets obtained.In the current period,it is not directly deducted as the pre tax expenditure and forms the deferred income tax assets.The compensation obtained by the seller should be reconfirmed as the income tax of the transfer income.On the basis of the above research,the article continues to show the specific tax treatment ideas of this article through the discussion of the case of the stock acquisition and VAM and the scenario extension hypothesis of a listed company.Finally,the article puts forward three proposals for improving the tax treatment work of VAM.