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The enterprise and buys the financing of tax planning research

Author: HeYiZuo GuanYongZuo From: www.yourpaper.net Posted: 2010-06-01 06:55:16 Read:
Keywords: the equity financing bond financing leveraged buyout tax planning
Abstract: merger will lead to huge cash outflows, relying on their own strength is very difficult to solve the funding gap problem, so often to the external financing.This article from the stock financing and bond financing two angles of view of planning acquisition financing of the tax, combined with cases study, the aim is to help enterprises to upgrade the idea of paying taxes, encourage enterprises to scientific and rational behaviors.
1 Introduction
Merger is the main trend of history.American famous economist, Nobel laureate George Stiegler once said: "the United States is not a big company, not by some degree, some form of mergers and grow up, almost no big company grew up only by interior expansion."Since nineteenth Century, emerged at the end of the company merger, so far, the western countries have experienced five merger waves, especially since the nineteen ninties, whether foreign or domestic, company merger and acquisition activity more than at any time in the past and frequent.As the rapid expansion of market share, the formation of scale effect, save operating cost, optimization is an effective means of capital structure, M & A has been favored by the Multi-National Corporation.It should be noted that, M & A is a very complex process, and because the merger will enterprises huge cash outflow, relying on their own strength is very difficult to solve the funding gap problem, so often to the external financing.A lot of financing for enterprises to choose, ways and means of financing the suitable for China's enterprises are retained, capital, credit, financial institutions and enterprises to issue bonds, seller financing and leveraged buy-outs.But to sum up, it is stock financing and bond financing in two forms, and regardless of the form of mergers and acquisitions of enterprises to raise the funds needed, needs to pay a certain price, this price is called the cost of capital.In the enterprise financing decision, not only to raise enough money, but also demands with low cost.Therefore, the fund-raising mode of tax planning in the enterprise merger and acquisition process, from the perspective of Taxation has important practical significance to reduce acquisition costs.
The definition of related concepts of 2
The 2.1 m & A
Merger and acquisition is a property transactions between enterprises, which include the following contents:
(1) merger.Annex (M e rger) containing annex, absorption, and meaning.Usually have a broad and narrow sense.The narrow sense refers to the merger under the effect of market mechanism, enterprises obtain the other enterprise's property right through the property right transaction, so that these enterprises lose the qualification of legal person, and get to their control behavior.Generalized merger refers to under the market mechanism, enterprises obtain the other enterprises in the property by the property transaction, and tried to get the control of economic behavior.
(2) the acquisition.The acquisition (A CQU isit io n) is refers to the enterprise assets and stock purchase behavior.Acquisition covers widely, the result may be owned enterprise almost all of the shares or assets, which will be annexed; can also be acquired enterprises greater part of shares or assets, so as to control the enterprise; there may be only a part of the shares or assets, and become a shareholder of the company.
Content acquisition and generalized merger are very close, so the academia and industry are often the mergers and acquisitions are collectively referred to as the merger and acquisition (M ergeran D A CQU isit ion).M & A is actually included in the role of market mechanisms, all property rights trading activity for enterprises to gain control over the other enterprises.
(3) the subject and the object of M & A.In the M & A, M & a body called the acquisition of enterprises, merger, enterprise merger bid; while the object is called the target enterprise, the merged enterprise, the acquired enterprise.
2.2 equity financing
Equity financing funds are not by financial intermediaries, with the stock of this vector directly from the capital surplus departments to the shortage of funds, money supply as the owners (shareholders) enjoys the financing enterprise control rights.This control is a comprehensive rights, such as attending a shareholders' meeting, a vote, participate in making important decisions, companies charge interest, share dividend.Equity financing has the following characteristics:
(1) long-term.With a permanent equity financing funds, no date, no return.
(2) the irreversibility.Enterprises to adopt equity financing without debt, investors to recover the principal, needs the help of the circulation market.
(3) without the burden of.Equity financing has no fixed dividend burden, payment of the dividend or not and the payment depending on how much of the company's operational needs.
2.3 debt financing
Debt financing is an enterprise through debt financing, the supply of funds to enjoy financing due back the principal and interest of the creditor.Relative to equity financing, it has the following characteristics:
(1) short-term.With time the use of debt financing to raise funds, be due for repayment.
(2) reversible.Companies use debt financing to obtain funds for repayment of principal and interest obligations, maturity.
(3) the burden of.Companies use debt financing to obtain funds, need to pay the interest on the debt burden of enterprises, so as to form a fixed.
(4) circulation.The bonds can be in circulation market free transfer.
2.4 tax planning
In the western developed countries, tax planning is to taxpayers for having heard it many times, but in our country, is at the initial stage, the theory of tax planning is not consistent.A representative point of view, tax planning refers to the taxpayer in the tax law, through the planning and arrangements for investment, management, financial activities in advance, as far as possible to save tax income tax cost.Tax planning has broad and narrow sense.General tax planning should be understood more broadly, such as through the specific tax planning activities, saving tax tax penalty, save tax fines; while the narrow sense refers only to the specific tax planning tax planning activities tax.
3 enterprise merger and acquisition tax incentives
With the development of M & A activity, for a single motivation of M & A activity has not seen.In many reasons in the mergers and acquisitions, tax has become an essential consideration.In the existing tax law under the conditions of tax incentives on mergers and acquisitions, mainly reflected in the following aspects:
First, the value of the assets of target enterprise change is to promote mergers and acquisitions in the strong tax incentives.According to the accounting practice, the book value of assets to reflect its assets at historical cost.Although they may also provide the relevant cost information, but the depreciation is still in assets at historical cost as the basis.If the market greatly exceeded the value of its assets at historical cost (this often happens, especially in the period of inflation), then by selling assets revaluation can produce greater depreciation tax amount.In the enterprise merger and acquisition under the purchase method, in order to reflect the purchase price, purchasing the assets of the enterprise value will increase, the amount of depreciation tax avoidance acquisition enterprises enjoy more than the target enterprises enjoy in the same assets.Thus the business after the acquisition of new owner can enjoy depreciation tax increases, while the original target of enterprise owner can also receive a portion of revenue through M & a party to pay the price of M & A.
Second, the enterprise can use tax losses deferred terms to reach the purpose of reducing tax burden.When an enterprise losses occur in a year, the enterprise can not only avoid paying the income tax, and its loss can also back to offset deferred, after several years of earnings.The income tax provisions of current enterprise income tax of our country and foreign investment enterprises and foreign enterprises deferred life is 5 years.So, if a serious loss of business in a year, or profit, not for several consecutive years, the cumulative loss has a considerable number of, will often be considered as acquisitions, or the enterprise consider mergers profitable enterprises, to take advantage of the tax advantages.
Third, when the acquiring firm to convertible bonds acquisition target enterprise, the acquisition of enterprises will be the target enterprise stock conversion of convertible bonds after a period of time and then convert to common stock.This can be in the income in advance of minus the convertible bond interest in tax laws, with tax effect, also can keep these bonds in capital gains, converting the bonds into shares after the payment, to enable enterprises to enjoy the deferred payment of capital gains tax revenue.
Fourth, when the merger and acquisition activity occurs, if both parties involved in M & A is not paid in cash, but to the stock exchange, the target enterprises stock according to a certain ratio into buying shares in companies.Because of this, in the whole process, the parties to the transaction shareholders have neither received cash, also unrealized capital gains, so this process is free.Through this acquisition, not tax situation, enterprises realize the flow of assets and transfer.
Fifth, tax other thorn
Bowel.In enterprise merger and acquisition, make full use of preferential tax policies of the state, make the prior planning and arrangements by the selection of M & A enterprise organization form, industry, enterprise M & a target location and mode of financing of M & A, transactions and accounting treatment method, can be as much as possible to save tax costs, so that the after-tax yield long-term stable growth, thus further promote the enterprise mergers and acquisitions.To make a long story short, tax plays an important role in M & A activity, is the enterprise can not be ignored in the decision-making and implementation of M & A in the important planning object.How to pay taxes according to law and actively use tax lever to each link of enterprise M & A to reduce the tax burden together in order to maximize the economic benefits, has become an important part of financial management of enterprises.
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