Abstract:Tax planning of enterprise mergers refers to a series of activities, which happens in the process of merger and acquisition, without violating the laws and regulations, through prior arrangements for tax-related matters occurred in the merger and acquisition activities, in order to achieve the goals of less tax or deferred tax. Reasonable tax planning not only reduce the acquisition cost of the enterprise, achieve the biggest benefits of the acquisition, but also promote the future development of the enterprise, play a key role in the enterprise survival after the merge. So, rapid development of Merger activities have an urgent need to make tax planning as its powerful decision-making tools.
To our current policy of accounting, tax law and actual situation speaking, tax planning of enterprise merger activities can be made from the following areas. First, analyze the target enterprise’s industry, financial status and tax benefits; second, analyze and select the payment method of merger; then, plan the enterprise's capital structure, so as to determine the financing ways and the debt ratio; finally, select the target enterprise’s organization form after the merger. It is the correct use of the above tax planning strategies, greatly reduces the merger costs and enhanced the enterprise’s competitiveness when the Lenovo purchased IBM.
However, proceeds and risk is the coexistence of whole. There will be the policy, operation, benefit not matching cost, and law enforcement risks in the tax planning activities. It requires planner studying tax policy timely and systematically, and gives reasonable forecast on the basis of accurately understanding; secondly, should pay attention to the comprehensiveness, consider all the contact between each tax, and the overall and long-term effect after merger by the planning scheme; finally, the enterprise shall invite tax planning experts to ensure that the planning scheme is authoritative and scientific, especially for the mergers, which play a decisive role in the enterprise management.
Keywords: Merger; Tax Planning; Strategy; Lenovo Deal