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Tax in Cross-Border Deals

Select jurisdiction(s)

Select specific jurisdictions to filter on. Alternatively select no jurisdictions and select questions below to see all jurisdiction answers for them.

Select question(s)

Select specific jurisdictions to filter on. Alternatively select no jurisdictions and select questions below to see all jurisdiction answers for them.

  • 1.

    In your jurisdiction, can the acquisition of a domestic target limit the target’s use of existing tax attributes, such as net operating loss carry forwards or tax credits? Are there strategies or structures to preserve such attributes?

  • 2.

    When companies that are resident in your jurisdiction are sold to foreign investors, is it more common to sell stock or assets?

  • 3.

    Are there particular structures that generate a step-up in the tax basis of assets in a tax-efficient manner?

  • 4.

    Are there structuring opportunities that would enable a foreign acquirer to provide equity consideration to the shareholders of a domestic target in a tax-deferred manner? Are the rules similar if both the acquirer and the target are domestic?

  • 5.

    Can management generally roll over its equity in an acquisition in a tax-deferred manner? Are there certain circumstances where a tax-deferred rollover is difficult or impossible?

  • 6.

    Which holding company structures are typically used by foreign investors to acquire domestic targets in your jurisdiction?

  • 7.

    What types of tax benefits typically arise in connection with transactions in your jurisdiction? Do the parties typically address allocation of such benefits in the transaction documents?

  • 8.

    Do real estate transactions (or transactions involving real estate holding companies) create special tax issues in your jurisdiction?

  • 9.

    Are there other categories of transactions (involving other types of assets or specific types of entities) that raise distinctive tax issues (for example, in the United States, transactions involving real estate investment companies and regulated investment companies)?

  • 10.

    Does your jurisdiction impose any distinctive taxes (eg, non-income taxes) that need to be specifically addressed when structuring and documenting cross-border deals?

  • 11.

    Do withholding taxes apply to transactions either from or into your jurisdiction?

  • 12.

    If withholding taxes apply to a transaction, what are the rates? Can they be reduced by treaty or are there structuring techniques or certification processes to avoid or mitigate the tax cost?

  • 13.

    Are VAT or transfer taxes significant? If so, in which types of transactions?

  • 14.

    Are there strategies to mitigate VAT or transfer taxes? What party typically bears the costs of VAT and transfer taxes?

  • 15.

    What is the statute of limitations for tax claims in your jurisdiction?

  • 16.

    In your jurisdiction, can a target be liable for taxes of other members of the consolidated group of which it was a member prior to an acquisition? Is the tax authority likely to assert such a liability against a target?

  • 17.

    Is there a typical approach to pre-closing tax indemnification in your jurisdiction?

  • 18.

    Are indemnification payments under a purchase agreement taxable to the recipient? Is an indemnity obligation in your jurisdiction typically grossed up for taxes?

  • 19.

    Under what circumstances would an investor in a target in your jurisdiction have a tax filing obligation in your jurisdiction solely as a result of its equity interest in the target company?

  • 20.

    In your jurisdiction, are there techniques to efficiently push debt down into subsidiaries in jurisdictions with high tax rates?

  • 21.

    Describe any limitations, such as earnings stripping or royalty stripping rules, that limit the ability to effectively shift taxable income when structuring M&A deals.

  • 22.

    Is there transfer pricing legislation in your jurisdiction that could apply to transactions among a target and its subsidiaries or affiliates? If so, how restrictive is it?

  • 23.

    Does your jurisdiction have anti-deferral regimes that apply to operations and income of subsidiaries (for example, a controlled foreign corporation regime, whereby a parent entity would be required to take into income undistributed income earned by a subsidiary)? Do these regimes affect cross-border planning?

  • 24.

    Are there exit strategies, besides stock or asset sales, that are used in your jurisdiction to achieve tax benefits?

  • 25.

    Discuss your tax treaty network and how that facilitates or impacts tax structuring for cross-border deals. Are any treaties being negotiated or renegotiated? Are any major changes in the structure of your treaties expected? 

  • 26.

    Does your jurisdiction identify certain jurisdictions as tax havens and subject them to adverse tax consequences when they are involved in M&A transactions? Give details.

  • 27.

    Describe any material state, provincial or local taxes that may arise in an M&A deal involving a target, a buyer or a seller located in your jurisdiction.

  • 28.

    Are there any proposed laws or regulations that could significantly change how transactions are structured in your jurisdiction?

  • 29.

    What are the corporate tax rates applicable in your jurisdiction on ordinary income and capital gains? Are there any other categories of income subject to preferential rates that are relevant in M&A deals in your jurisdiction?

  • 30.

    Does your jurisdiction impose any taxes as a result of the indirect transfer of a company organised in your jurisdiction? 

  • 31.

    Are there significant tax issues relating to foreign currency matters in transactions in your jurisdiction involving buyers or sellers resident in other jurisdictions?

  • 32.

    Discuss and describe any other relevant tax issues in cross-border M&A transactions in your jurisdiction that are not covered in the prior questions.

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