Research On Income Tax Planning Of Enterprise Merger And Reorganization

Since the nineteenth century,many well-known monopoly giants,such as DuPont,Standard Oil and General Electric,have gained monopoly status through large-scale mergers and acquisitions.Although the M&A of Chinese enterprises started late,with the deepening of reform and the further adjustment of economic structure,and with the continuous promotion of M&A market-oriented by the government,more and more large enterprises tend to enhance their competitiveness through M&A and restructuring,and achieve rapid development.Merger and acquisition and restructuring has become an important way for the development and growth of enterprises.In the whole process of mergers and acquisitions,tax issues run through the whole process,and even influence the success or failure of mergers and acquisitions.With the increasing business of mergers and acquisitions,and the ways of M&A and payment are gradually diversified,and the tax issues involved becoming more and more complex,tax planning has become a major issue of common concern to all parties involved in mergers and acquisitions.Since the implementation of the new Enterprise Income Tax Law in 2008,the Ministry of Finance and the State Administration of Taxation have issued several tax documents on merger and reorganization to regulate them.Therefore,the rational design of M&A plan that based on the actual situation of enterprises,such as the motivation of M&A,and business model and so on,and then combined with the latest laws and regulations of our country will reduce the expenditure of M&A,reduce the burden on enterprises and effectively control tax risks.The research in this paper is based on the theory of effective tax planning,combined with the case of Zhonghua enterprise acquisition of Zhongxing Group,using literature research method and case study method,studying the income tax planning of the merger and acquisition between enterprises by the combination of qualitative and quantitative methods,and elaborated the planning points and risk points of income taxin the process of mergers and acquisitions.Through the case of Zhonghua enterprise acquisition of Zhongxing Group,this paper finds that:(1)Tax planning is a kind of tax arrangement based on the overall strategy and business model of enterprises,so the goal of tax planning is not to minimize the tax burden,but to help enterprises maximize their value.(2)In tax planning of M&A and reorganization within an enterprise group,it is necessary to consider the overall interests,to make overall planning according to the existing resources and tax burden of all parties in the group,to reduce the overall tax burden and maximize the common interests.In the non-related party transactions,we should also pay attention to the tax-related issues of the parties involved in the transaction,so as to know each other well,achieve the reorganization goal smoothly and reduce the cost of mergers and acquisitions.(3)In the process of M&A and reorganization,enterprises need to make sure that "Food and fodder should go ahead of troops and horses." Tax planning should precede contract signing and accounting treatment.Contract is the effective evidence reflecting the essence of transaction economy.Accounting treatment is the prerequisite of tax treatment to a certain extent.Both of them have an important impact on the success or failure of tax planning and tax risk avoidance.It is hoped that the elaboration of this article will provide some inspiration for enterprises that make tax planning for similar mergers,help enterprises reduce merger costs,effectively prevent tax risks,and improve the success rate of M&A.