Research On The Tax Synergy Effect Of Corporate M&A

The tax game between the government and the enterprises is zero sum game.The enterprises get the tax savings of enterprises through mergers and acquisitions,which is the tax benefits that the government transfer in order to encourage mergers.Therefore,the company M&A tax synergy is encouraged in order to study the effect of tax policy of mergers and acquisitions.Do companies pay attention to M&A tax problems in the practice?How about M&A tax policy merger incentive effect on the company?Do they obtain tax synergy effect by M&A?Studying these problems would extend the tax synergy effect theory of M&A and provide theoretical support and empirical evidence for M&A tax reform,and provide new decision-making behavior standard for M&A.In this paper,we give the comprehensive consideration of target enterprise loss,tax breaks,the influence of the debt tax shield,depreciation of baffle to express tax synergy effect evaluation instead of only actual income tax rate.The proportion of tax savings obtained by shareholders is the index value of tax synergy before M&A in special tax treatment,the actual tax burden fell after the merger,debt tax shield effect increasing and the effect of the tax shields as index of tax after the merger synergies,before and after the mergers and acquisitions in the comprehensive tax coordination effect factors,finally it is concluded that the total tax revenue synergies of company M&A.Based on the theory of stakeholder maximization,the synergy effect of corporate merger and acquisition reflects the tax saving in the process of merger and acquisition.The tax benefits of the shareholders of the Target Corp is an important source of corporate mergers and acquisitions tax synergies.It takes into account the interests of all stakeholders,fully reflects the tax savings in the process of mergers and acquisitions.The incentive effect of tax policy on M&A is better evaluated.However,about 87%of the companies in the Sample Firms in the M&A transactions choose a complete cash payment,closing the door to the acquisition of special tax treatment.It affects the incentive effect of tax policy of mergers and acquisitions.It also shows that M&A company is not willing to accept the tax incentives.From the M&A mode of payment and pre tax savings,the majority of M&A companies ignore the cost of mergers and acquisitions.The direct consequence of this phenomenon is that the tax incentive effect is not good.The macro control function of tax is shortened.The study also found that the number of firms with tax synergies was smaller than that of companies that had become worse after the merger.From the point of view of the synergy effect of the total tax revenue,the company with the negative tax synergy effect accounts for the majority.The number of listed companies after the merger with tax situation are more than the number of companies with better tax situation,signifying the possible trap of merger tax synergies.To a certain extent,it denies the theory of tax incentives for mergers and acquisitions。the process of merger and acquisition,the tax synergy effect before M&A is asymmetric.The natural person shareholders and the legal person shareholders are double tax treatment.The new regulations allow the current cash is not sufficient to pay personal income tax deferred within 5 years.However,the tax differential treatment of natural person shareholders has not been completely resolved.