Mergers And Acquisitions Tax Policy Studies

M&A is short for mergers and acquisitions and is essentially a transfer of property rights. From a micro perspective, M&A (mergers and acquisitions) is an fast way of accessing to factors of production. It is also helps the company to break trade barriers into a new industry. Therefore, M&A business is considered to be one of the three engines for business growth by McKinsey. From a macro perspective, M&A is the tool to optimize the allocation of social resources. It should play an active role in the economic restructuring, industrial upgrading and economic development patterns changing. Therefore, M&A is an important means of implementation the "twelve five" plan to improve industry concentration and the development of internationally known and core competitiveness of enterprises. The studies of M&A have very important theoretical and practical significance. In the market economy, taxation is one important means of macroeconomic control. Taxation has very important influence on the M&A transactions, but there are some defects in China's M&A tax policy. How to apply tax-free policy to encourage mergers and acquisitions moderately, at the same time curbing the transaction which views the tax benefit as the main motive, that is the purpose of this paper.This study used normative approach. First of all, on the basis of description the concept, classification, cause of M&A, the paper emphatically analyzed the tax synergies of M&A and the impact of taxation on M&A. Secondly, around the tax-free M&A, the paper discusses its meaning, tax treatment, conditions, necessity and significance of setting tax-free M&A. This part focuses on three tax-free the conditions (the reasonable commercial purposes, equity and business sustained), then conclude that there are two important reasons to set tax-free terms of M&A—tax neutrality principle and compromise of accretion tax model and consumption tax model. Thirdly, this paper introduces foreign tax-free policy in accordance with merger, stock purchase, asset acquisition, emphasizing the case of the United States. The last part describes the historical evolution of tax-free M&A policy. On the basis of values of moderately encourage M&A activity and anti-avoidance, I analyzed the current policy of tax-free merger problems, and then gave 4 policy proposals to further improve.This article specializing in M&A tax-free policy paper, mainly apply the method of qualitative analysis, the lack of quantitative analysis and case studies. The other inadequacies of this article are the lack of discussion over cross-border M & A.