The Usage Of Tax-Free In Merger & Acquisition

In the developed market economic entity, Merger & Acquisition has become an efficient way for the enterprise to optimize the resource, change the industry structure and promote the competitiveness. The main developed country executed a tax-free policy for the qualified deals in order to urge the enterprise Merger & Acquisition between the enterprises. Whether the deal could be tax-free or not depends on the way of payment. When the deal leads a non- stock right -payment,the company will be regarded having realized capital gain while tax will be levied.As many other countries,our country gives a tax-free if the company Merger& Acquisition's payment is with stock right.My paper is aim to help the enterprises understand and learn how to use the tax-free policy during M&A deals while maximizing the enterprise profit through tax planning, according to the research of the M&A history in the world and the development of the tax-policy through the case of assets displacement of GUANGZHOU LENGJI.