Study On Tax Planning Of Cross-border M&A

Since President Xi Jinping put forward the "One Belt and One Road" policy,Chinese enterprises have actively responded to the policy call and implemented the "Go Global" strategy,carrying out a large number of investment activities overseas.Among numerous investment projects,the mode of investment through overseas mergers and acquisitions has more advantages in all aspects.Therefore,in recent years,the number of overseas mergers and acquisitions of Chinese enterprises have increased rapidly.Tax is an important factor to be considered in cross-border mergers and acquisitions.Reasonable tax planning means can minimize the cash outflow of enterprises,delay the tax payment to obtain the time value of funds,avoid unnecessary tax losses,and maximize the interests of both parties.Taking Chemchina’s merger with Syngenta as an example,this paper analyzes it from three stages: equity acquisition stage,holding stage and investment exit stage.By analyzing the tax planning measures adopted by the case company,and comparing the tax burden that the case company should bear and the role of the holding structure in different measures,this paper aims to summarize the feasible tax planning plan of Chemchina in cross-border m&a.Then,the paper summarizes the tax planning methods that can be adopted by Chinese enterprises in the tax planning of cross-border mergers and acquisitions,so as to provide reference information for Chinese enterprises "going global".Through the analysis of the above chapters,it can be concluded that reasonable tax planning method can effectively reduce the tax burden of enterprises in cross-border mergers and acquisitions.The key to the plan of the acquisition stage is the capital arrangement,that is,the tax shield effect brought by the debt financing.However,we should pay attention to the regulation of capital weakening.The tax planning in the holding stage is mainly based on the design of the holding structure,and the key is to set up the intermediate holding company by using the international tax agreement network.However,it is necessary to pay attention to the qualification of residents and the tax planning risks of controlled foreign enterprises.The key of tax planning in the exit stage is to choose a suitable intermediate holding company for the transfer.Attention should be paid to whether the special tax treatment conditions are met,and the country in which the transferred equity company is located is preferred to pay little or no capital gains tax and stamp duty on the equity transfer.