Acquisition can be divided into three stages: early analysis, mid-term implementation and late integration. Pre-analysis is particularly important, because once the acquisition agreement is signed, no matter whether the result is good or bad, the process is irreversible. For example, Changhong acquired Thomson of France. After the acquisition was completed, it was found that Thomson's CRT technology was outdated and Thomson had a huge debt black hole. But at this time, Changhong was also very helpless, and the failed merger and integration made Changhong lose a lot. This is all because there are major problems in the previous M&A analysis and due diligence.
The previous analysis and investigation first carefully evaluated the value of the acquired target and whether it can be successfully digested and integrated after the merger. Although the merger of "snake swallowing elephant" is exciting, the difficulty of digesting an elephant with a snake can be imagined. Just as Liu Chuanzhi, who bought IBM, said on the eve of the acquisition, "Well done, step into the sky, not well done, go to hell." Then there are control risks, operational risks and asset-liability risks. In China, debt risk is particularly important (including contingent liabilities). Statistics show that most mergers and acquisitions have been proved unsuccessful, but some enterprises have higher success rates, such as Wanxiang Group in Shandong. Do mergers and acquisitions must learn to do pre-merger analysis. In short, we must do our homework before the merger.
M&A can be roughly divided into three categories. One is vertical M&A, which extends to the upstream and downstream of the industry, such as Greencool's acquisition of Kelon; The second horizontal merger and acquisition of peers, such as Zoomlion's acquisition of CIFA company; The third category is cross-border mergers and acquisitions, such as Lenovo's acquisition of mobile phone manufacturers. Mergers and acquisitions have different purposes, all of which are to maintain the supply of raw materials. Of course, many mergers and acquisitions in the current capital market are aimed at creating concepts and raising stock prices. Of course, some have multiple purposes, and a few are due to "lack of humanity".
After selecting M&A, how to design M&A mode? Buy assets, buy equity, separate through merger, or restructure debts? First of all, we should consider how to achieve the purpose of mergers and acquisitions, followed by risk prevention, and then tax planning. For example, if Company A wants to control the listed company B, it can only control the equity of Company B or the parent company of the controlling shareholder, and asset acquisition cannot achieve the purpose of merger and acquisition, even if the tax expenditure generated by asset acquisition is less, it will not adopt this method.
The second consideration is risk prevention. The risks here mainly include the risks of assets and equity disputes, administrative punishment, employee problems, litigation and debt. When purchasing assets, it is necessary to investigate whether there are defects in the assets, such as whether to set a mortgage, whether to transfer ownership, whether there is a third party claiming rights, etc. Equity acquisition should focus on investigating what litigation cases the enterprise has, whether there are administrative penalties and a large number of unknown debt risks. In addition, the problem of employees is also a problem that needs attention. If it is not solved well, it will affect the merger and integration. "Chinese-style" employees should pay attention to both asset acquisition and equity acquisition, find out the risk points, and then use M&A design to avoid risks to the maximum extent.
Finally, tax planning can be carried out to control tax costs when the acquisition purpose can be achieved and the risks can be controlled.
Tax avoidance planning should first solve the problem of which side to plan, the buyer or the acquired party, or minimize the overall tax burden (pursuing the minimization of the overall tax burden under the same control). This paper takes the tax avoidance of the acquired party as the planning starting point. The reasons are as follows: first, the "seller" pays taxes, that is, the acquirer pays the heaviest tax in the acquisition; second, the acquirer often raises the selling price because of the heavy tax, and transfers part of the tax to the acquirer. So to some extent, it can be said that tax avoidance to the acquirer is also tax avoidance to the acquirer. Of course, in some cases, there will be an effect of "saving taxes on one hand and losing money on the other". In this case, the acquirer needs to pay more attention.
Acquisition is mainly divided into equity acquisition and asset acquisition, which involves the question of how much to buy. For example, buying all the shares of the whole enterprise is an acquisition, and buying 25% of the shares of the enterprise is an acquisition. According to Article 1 of the Notice of the Ministry of Finance of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China on Several Issues Concerning the Handling of Enterprise Income Tax in Enterprise Restructuring Business, "Equity purchase refers to the purchase of shares of another enterprise by an enterprise to control the transactions of the acquired enterprise." It can be seen that the standard of equity acquisition is whether to "control" the enterprise, and the specific proportion varies. In the secondary market, many large shareholders can control the shareholders' meeting and the board of directors, which is of course related to the decision-making procedures of joint-stock companies in the Company Law. The shareholders' meeting decided to vote on the basis of "shareholders present at the meeting" instead of all shareholders, but it was also related to some minority shareholders giving up exercising their power. The following table shows the tax generated by asset acquisition and equity acquisition.
As can be seen from the above table, the tax generated by asset acquisition is heavier, and the tax pressure of the acquired party is greater, but it cannot be judged that equity acquisition is superior to asset acquisition. As mentioned above, the acquirer chooses to consider the realization of acquisition purpose and acquisition risk control, and in some cases, it is impossible to realize equity acquisition, such as the acquired enterprise is a partnership enterprise.
(B) the introduction of preferential tax policies for mergers and acquisitions
The following introduces the key taxes involved in the acquisition, because the additional tax, stamp duty and deed tax are relatively simple, and this article will not say it for the time being.
(1) business tax
Article 1 of the Business Tax Regulations stipulates that units and individuals that provide labor services, transfer intangible assets or sell real estate in People's Republic of China (PRC) are taxpayers of business tax and shall pay business tax in accordance with these regulations.
According to China's current business tax regulations, business tax is levied according to the transaction amount of labor services, intangible assets and real estate, and its taxpayers are different from deed tax. The deed tax taxpayer is the transferee, that is, the transferee of land or house property rights, while the business tax taxpayer is the "seller", which has different effects on tax planning.
According to the Announcement on Taxpayer's Business Tax Related to Asset Restructuring, the taxpayer's transfer of all or part of physical assets and related creditor's rights, debts and services to other units and individuals through merger, division, sale and replacement in the process of asset restructuring does not belong to the scope of business tax collection, including the transfer of real estate and land use rights, and no business tax is levied.
For example, since 2003, China Petrochemical Group Industrial Co., Ltd. has set up a number of product oil pipeline project departments in Guangdong, Shandong and other places to be responsible for the operation and management of product oil pipelines within Sinopec Group. The sales industry of China Petrochemical Group intends to transfer the property rights of the above-mentioned product oil pipeline project department to China Petrochemical Co., Ltd., and the Notice of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on the Business Tax on the Transfer of the Property Rights of the Product Oil Pipeline Project Department by China Petrochemical Group Sales Industry Co., Ltd. (Guoshuihan 2002 165) stipulates that the above-mentioned transfer behavior does not fall within the scope of business tax collection, and no business tax is levied.
(2) VAT
Article 1 of the Regulations on Value-added Tax stipulates that units and individuals that sell goods or provide processing, repair and repair services and import goods within the territory of People's Republic of China (PRC) are taxpayers of value-added tax and shall pay value-added tax in accordance with these regulations. According to the regulations, as long as there is "added value" in selling goods and providing processing and replacement services in China, it must pay taxes to the state.
According to the Announcement on Issues Related to Value-added Tax on Taxpayers' Asset Restructuring, "In the process of asset restructuring, taxpayers transfer all or part of their physical assets and their associated bonds, debts and services to other units and individuals through merger, division, sale and replacement, which are not within the scope of value-added tax collection, and the goods involved are not subject to value-added tax." In other words, if an enterprise transfers its related creditor's rights, debts and labor force at the same time when transferring assets, it does not need to pay VAT. However, the reduction or exemption of VAT will involve that the buyer cannot obtain VAT invoices, and the buyer cannot deduct the input tax when transferring assets next time. In fact, VAT is passed on to the buyer, so the buyer should be careful here.
(3) Land value-added tax
In the current economic environment, enterprises are valuable mainly because they have land. When the land value-added tax is high, it often makes land resale enterprises stunned. However, the land value-added tax rate in China is progressive. As long as the land appreciation exceeds 200%, the government will charge 60% of the appreciation. However, according to the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Some Specific Issues Concerning Land Value-added Tax (Caishui [1995] No.48), acquiring land through merger is also a way to avoid high land tax increase, but at the expense of bearing all assets and debts, we need to weigh it carefully here.
(4) Enterprise income tax
Regarding the income tax planning, everyone is discussing the No.59 and No.4 documents issued by the Ministry of Finance and State Taxation Administration of The People's Republic of China, but there are not many real estimates. Admittedly, the above two documents are really obscure, but if you want to understand tax avoidance, you must read them all. Income tax deferral has nothing to do with the acquisition target, and both asset acquisition and equity acquisition can defer income tax payment. The key lies in the form of payment of the acquirer. As long as the five conditions listed in this paper are met and the proportion of equity payment reaches 85%, the income tax can be postponed (there are many explanations here). The forms of equity payment here include equity payment of its holding subsidiaries and private placement of listed companies to acquired companies.
When dealing with deferred income tax with special tax, we should pay attention to the problem of tax burden transfer. Here, I borrow a case from others to illustrate. Company A purchased 0/00% equity of Company C/KLOC, a wholly-owned subsidiary of Company B, and the long-term equity investment of Company B in tax basis was 600 million yuan. After evaluation, the fair value of the net assets of Company C is 10 billion yuan, which has been treated by general tax and special tax respectively.
General tax treatment
Company B should confirm the income10-6 = 400 million yuan, realize the income of 400 million yuan, and pay enterprise income tax. Tax basis: Whoever bought the equity of Company B is confirmed according to1000 million yuan, and Company B transfers the equity of Company A 100% at the transfer price of1000 million yuan, and its tax basis is also 65438+. Company A sells the long-term equity investment -C, and its fair value is 654.38+0 billion yuan, and that of tax basis is 654.38+0 billion yuan. There is no income from this transfer;
Conclusion: After the general tax treatment, there will be a second transfer and no income, that is, as long as the first general tax treatment produces a one-time income of 400 million yuan, the tax will be paid in one lump sum.
Special tax treatment
Tax basis: Company A's acquisition of company C's equity is determined according to the original tax basis of the acquired equity, namely 600 million yuan, and Company B's acquisition of company A's equity is determined according to the original tax basis of the acquired equity, namely 600 million yuan. Under the special tax treatment, Company B deferred the income of 400 million yuan that should have been realized to Company A. Suppose Company A sold the long-term equity investment-Company C to Company D, with a fair value of 654.38+0 billion yuan and realized income of 400 million yuan. The income that should have been realized by Company B is deferred to Company A. If Company B transfers the shares of Company A to Company F within 65,438+02 months, assuming that the transfer price is still 6,543,880 billion yuan and the tax basis is 600 million yuan, the income will be 400 million yuan. The acquirer successfully delayed paying taxes, but the acquirer overpaid 400 million yuan in income tax. This kind of planning acquirers should know fairly well.
Four. Introduction to other common tax avoidance methods
Enterprise income tax is the heaviest tax burden for enterprises. Imagine that as long as your income is 100, the state will take at least 25 of it, but as long as it is properly designed, we will reduce the tax burden.
The first is to consider the registered industry and place of registration. Companies can choose industries with preferential tax. For example, the state levies 15% income tax on key high-tech enterprises. At present, some enterprises register high-tech enterprises by purchasing intellectual property rights. As long as companies use shells for capital operation, they can choose to register in remote areas such as special zones or Xinjiang. These places have strong tax incentives. For example, many large companies set up some shell companies in Xinjiang to reduce their holdings.
Then, reduce the level of income tax payment. Some companies create convenience for Tengnuo Capital in capital operation, and set up multi-level companies between "first-line companies" and "actual controllers behind the scenes". VIE structure is one of the typical examples, and more companies pay more income tax. When considering the benefits, we should consider whether it is possible to lower the enterprise level. From the perspective of simple and rude tax avoidance, "the fewer levels, the better."
Considering the nature of enterprises, since the promulgation of the Partnership Enterprise Law, a brand-new tax payer has appeared in economic activities. There are many differences between a partnership and a company as a legal person in terms of responsibility and management, but in some cases, a partnership can be established when it can achieve its business objectives. For example, many PEs choose the form of partnership.
There is also a "yin-yang contract". Although the yin-yang contract is listed here, I don't recommend this method. I advocate legal tax avoidance, but it also plays a warning role as a negative textbook. Yin-Yang contract is mainly written into the contract at a fictitious price lower than the actual price to reduce the tax burden for the acquirer. But how does the acquirer explain it? Does the acquirer resell the tax basis at the contract price or actually pay the price next time? If VAT is to be paid, the acquirer has to bear more risks of paying VAT.
You can also use merger and division, for example, there are many subsidiaries under the same group, and the income tax is paid separately, so the profits and losses cannot be offset. However, if the merger does not affect the operation between subsidiaries, the merger can greatly reduce the payment of income tax. The last question mentioned that the purchase of assets will generate a lot of tax burden. The acquisition of variable assets is equity acquisition, and the underlying assets are separated from the original enterprises and become separate enterprises, and the equity is transferred. However, this separated enterprise will be jointly and severally liable to the original enterprise, and the advantages and disadvantages need to be carefully weighed.
Debt restructuring is also possible, because according to Circular 59 and Circular 4, the income tax of debt restructuring is amortized in five years, which reduces the tax pressure of enterprises.