China's Mergers And Acquisitions, Tax Planning Study

Tax-planning refers to the reasonable and well-designed plan that the taxpayer makes for his own financing,investment and operation,within the limits permitted by the existing taxtation system,to gain as many benefits as possible in tax saving and fufill the goal of stockholders' wealth-maximizing or enterprise' value-maximizing.Tax-planning is widely known in foreign countries,especially in the developed western countries,but it is still in starting stage in China. With the setting-up and improvement of socialist market economy and China's entry into WTO ,tax-planning,one of the important means that taxpays lower cost and enhance competitiveness,will certainly develop faster than ever before.From the perspective of M&A,this paper probes into some tax problems associated with links in the process of M&A.In real economic life,many enterprises in China overlook the organic combination of M&A and tax-planning,which makes enterprises pay more tax in M&A activity and add to the enterprises' tax burden.Therefore,attention should be paid to tax-planning in M&A so as to reduce the M&A and lighten the tax burden.This paper consists of four major parts.The first major part concludes the first,second and third chapter.Chapter One introduces the connotation,causes,types and proceeding of enterprises' M&A.Chapter TWO introduces tax-planning,including the concept ,necessity ,train of thought and the key of technique of tax-planning and points out the relation between M&A and tax-planning,finding out the both's common part so as to foreshadow the tax-planning in M&A activity which is expounded later.The second major part comprises Chapter three which is the emphasis of this paper,expounding tax-planning analysis in M&A.This part is composed of five small parts within the framwork of taxation on M&A and recombination,according to the M&A proceeding,employing the train of thought and technique,the paper analyzes and sets forth tax-planning with cases.The third part involves Chapter four which is a second emphasis of this paper,integrating tax-planning analysis in M&A the former chapter having introduced with one case.The last part is this paper's conelusion,showing that an enterprise maybe not merger and acquire another one only due to taxation.But we should not ignore the importance of tax-planning in M&A.Because taxation is one siganificant factor of enterprise's financial decisions.