Merge In The Difference Between Tax Research

Our country has issued a new ASBE(Accounting Standards For Business Enterprises)in2006, in order to adapt to the development and changes of economic environment, aswell as make the enterprise accounting more reasonable. This not only makes the basicimplementation international convergence of accounting standards system in our country,but also makes the accounting method of M&A(Mergers and Acquisitions) more clear. Atthe same time, a special provision of the tax codes among M&A operation have beenapproved in our country. The most complicated one is corporate income tax policies. In2009, the Ministry of Finance and the State Administration of Taxation jointly issued the“The Clarification about the Process of Corporate Income Tax in M&A Operation”, and in2010, the State Administration of Taxation issued “The Regulation of Corporate IncomeTax in M&A Operation”. These2tax codes clarify the operation and management issuesof corporate income tax in M&A business.Enterprises, as the main part of M&A business, on the one hand, have toconduct accounting procedures according to ASBE, on the other hand, have to calculatetaxes according to relevant provisions of tax codes. For the goals and principles ofaccounting and taxation are different, the operations of accounting and taxation in M&Abusiness are obviously different. Thus, there are certain extent influences to the enterprisefinancial and tax officials. The book-tax difference of non-recurring items makes it difficultto adjust book revenue to tax payment. In addition, officials may confuse accountingoperations with taxation operations. It increases the compliance cost of accounting andtaxation.This paper introduces M&A business under the perspective of tax and accounting,respectively from the related concepts and principles, and uses a small M&A case toexplain accounting and tax treatment methods. This paper analyzes the book-taxdifferences of M&A business. According to the accounting processing stages, the paperdivides M&A business into3parts, including initial confirmation, the period of holding,and equity investment disposal. On this basis, this paper analyses the influences tocompanies of book-tax differences in M&A business and focus on the tax related riskpoints, to remind enterprises pay special attentions to these matters. Finally, the articlegives suggestions to coordinating book-tax differences in M&A business, according to theclassification of book-tax differences. Hoping this can constantly improve the M&Amarkets and the accounting and tax policies in our country.