Tax Planning In Mergers And Acquisitions Of Commercial Real Estate Company In China

Commercial real estate is an emerging industry which combines features of both real estate and commercial.By the opportunity of the government implementing a series of regulatory policies on the real estate market in 2010,Commercial real estate emerged and developed rapidly.In 2013-2014 Chinese Commercial real estate investment grew at an average annual growth rate of as high as 35%.However,with the growth of Chinese Commercial real estate investment and construction,the Commercial real estate industry did appear some problems.Different from the traditional residential real estate,commercial real estate projects often require enterprises to invest a lot of money for project development,operation and investment,the project operation cycle is relatively long,large proportion of funds and capital recovery slow,enterprises have to bear a higher investment risk.In order to survive in the increasingly competitive environment,many commercial real estate companies will seek more opportunities for transformation and upgrading on the strategic level.To achieve economies of scale and enhancing the competitiveness of enterprises,they usually through mergers and acquisitions to expand the company and market concentration.In addition,the tax burden control is an effective way to control the cost and house price of the commercial real estate project.Especially,in the face of the continuous improvement of the tax law system in our country,including the business tax reform VAT in 2016,in order to achieve the maximization of mergers and acquisitions,the commercial real estate enterprises need to conduct a reasonable and legitimate tax planning before M&A.So,how to achieve the minimum cost of mergers and acquisitions in the process of mergers and acquisitions will be the key issue to be solved in this paper.In order to solve the above problems,this paper will proceed from the characteristics of commercial real estate industry,combined with China’s current commercial real estate tax burden status and business tax reform VAT,based on the existing literature and cases to sort out and summarize the tax planning of commercial real estate mergers and acquisitions process.And then use a systematic perspective on commercial real estate mergers and acquisitions to put forward targeted and effective tax planning program,which can help to make full use of tax leverage,achieve the minimum cost of mergers and acquisitions,maximize the capital value.At the same time,in order to verify the validity of the systematic tax planning,this paper enumerates the actual case analysis of Company A.The research shows that the commercial real estate enterprises can choose an optimization plan with the help of a systematic perspective from the whole process of mergers and acquisitions,including the selection of the subject,the way of financing,the financing mode and the establishment of the enterprise organization form.In which ways can help company achieve the optimization of M&A costs,but the choice of the above strategy should be based on Corporate Strategic Objectives and Planning.