The main types of taxes involved in corporate mergers, acquisitions and reorganization transactions and their tax preferential policies are sorted out and summarized as follows.

(1) Merger of enterprises with preferential tax policies

The differences in preferential tax policies between regions determine that when acquiring target companies of the same nature and operating conditions in different regions, Different benefits are available. Among the preferential tax policies stipulated in my country's current income tax law, one category is regional preferential treatment:

For high-tech enterprises registered in high-tech development zones approved by the State Council, income tax can be reduced by half; Newly established enterprises in border and poor areas can enjoy reduced or exempted income tax for 3 years;

For domestic enterprises located in industries encouraged by the state in the central and western regions, from 2001 to 2010, Income tax can be levied at a reduced rate of ?15%. When merging and acquiring companies, you can make use of the regional preferential policies in my country's current tax laws and choose the target company in a region that can enjoy preferential policies.

In this way, this discount can be used to transfer group profits to low-tax areas through acquisitions, thereby reducing the group's overall tax burden and saving the company a lot of future expenses.

(2) Merger of loss-making enterprises

Profitable enterprises can choose those enterprises that have suffered serious losses in one year or have not made profits for several consecutive years and have incurred considerable losses as merger targets. With the target company, the book losses of the loss-making enterprise are used to offset the taxable income of the profitable enterprise, so as to make full use of the preferential policy of mutual offset of profits and losses to reduce tax payments, so as to reduce the income tax burden of the merged enterprise.

According to the relevant regulations of the State Administration of Taxation, if the merged enterprise continues to have the qualification of an independent taxpayer after the merger, its operating losses that have not been made up before the merger shall be taxed by the enterprise in subsequent years within the period stipulated in the tax regulations. The income shall be continuously made up year by year, and shall not be made up with the income of the merging enterprise;

If the merged enterprise does not have the qualification of an independent taxpayer after the merger, its operating losses that have not been made up before the merger shall be made up within the period specified by tax regulations. Within the period, the merging enterprise can continue to make up the compensation year by year with the income of subsequent years. Therefore, in the tax planning of enterprise mergers, the independent taxpayer qualification of the merged enterprise can be cancelled, and the policy of making up for losses can be applied to achieve the purpose of reducing the tax burden.

Extended information:

Company merger and acquisition business license

A securities company that engages in financial consulting business for mergers, acquisitions and reorganizations of listed companies must meet the following conditions:

(1) The company’s net capital complies with the regulations of the China Securities Regulatory Commission;

(2) It has a sound and well-functioning internal control mechanism and management system, and strictly implements risk control and internal isolation systems;

(3) Establish a sound due diligence system and have a good project risk assessment and verification mechanism;

(4) The company’s financial accounting information is true, accurate and complete;

(5) The company’s controlling shareholders and actual controllers have good reputations and have no records of major violations of laws and regulations;

(6) There are no less than 5 financial advisory sponsors;

(7) China Other conditions specified by the Securities Regulatory Commission.

Reference: Baidu Encyclopedia - Corporate Mergers and Acquisitions