The Research On Tax Planning Of X Airlines Co.,LTD Merging H Airlines Co.,LTD

Economic globalization forces enterprise expanding. Mergers and acquisitions, the economic product, appears in order to rapidly expanding the scale of enterprises. The complexity of mergers and acquisitions restricts the success of M&A by many factors, and the cost of M&A has a significant impact. Now in many mergers, tax accounted for a very important part of transaction costs, and tax planning is an important financial decision in mergers. Tax planning, on the premise of comply with national laws and in accordance with the government policy guidance, is an action of reducing the tax which is planning in advance. Then, the taxpayer selects the most optimal scheme, to fully use their own legal rights. The success of the M&A tax planning can reduce the corporate tax costs therefore maximizing financial interests. Through the tax planning, the enterprise increases the income of the financial interests.This paper combining theory with practice analysis, studies on tax planning of X airline co., LTD. merging H airlines co., LTD. Starting from the theory of business combination and tax planning, this paper analyzes the M&A motivation. Secondly, combined with the present situation of X airline co., LTD. and H airline co., LTD., the paper analyzes the two companies' financial status and tax-related case. And then, an optimal planning scheme is worked out by planning the choice of merger object, the way of payment and financing, and the choice of organizational form. After the study, choosing equity purchased, paying in equity, debt financing and take the branch form after the merger is the best ways of tax planning. There are many risks of asymmetric information, changing of tax policy, mergers and acquisitions selection and personnel quality in tax planning; therefore the risk analysis is necessary. Insist on the legality of the tax planning, doing due diligence before M&A, conducting comprehensive planning and improving the employees'professional quality are the solutions of avoiding risks in tax planning.After studvina on the tax planning in M&A, the preventive measures out forward as far as possibly to guide enterprises to plan tax legally and avoid risks in mergers which maximizes corporate interests.