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  • 1.

    Tax treatment of different acquisitions
    What are the differences in tax treatment between an acquisition of stock in a company and the acquisition of business assets and liabilities?

  • 2.

    Step-up in basis
    In what circumstances does a purchaser get a step-up in basis in the business assets of the target company? Can goodwill and other intangibles be depreciated for tax purposes in the event of the purchase of those assets, and the purchase of stock in a company owning those assets?

  • 3.

    Domicile of acquisition company
    Is it preferable for an acquisition to be executed by an acquisition company established in or out of your jurisdiction?

  • 4.

    Company mergers and share exchanges
    Are company mergers or share exchanges common forms of acquisition?

  • 5.

    Tax benefits in issuing stock
    Is there a tax benefit to the acquirer in issuing stock as consideration rather than cash?

  • 6.

    Transaction taxes
    Are documentary taxes payable on the acquisition of stock or business assets and, if so, what are the rates and who is accountable? Are any other transaction taxes payable?

  • 7.

    Net operating losses, other tax attributes and insolvency proceedings
    Are net operating losses, tax credits or other types of deferred tax asset subject to any limitations after a change of control of the target or in any other circumstances? If not, are there techniques for preserving them? Are acquisitions or reorganisations of bankrupt or insolvent companies subject to any special rules or tax regimes?

  • 8.

    Interest relief
    Does an acquisition company get interest relief for borrowings to acquire the target? Are there restrictions on deductibility where the lender is foreign, a related party, or both? Can withholding taxes on interest payments be easily avoided? Is debt pushdown easily achieved? In particular, are there capitalisation rules that prevent the pushdown of excessive debt?

  • 9.

    Protections for acquisitions
    What forms of protection are generally sought for stock and business asset acquisitions? How are they documented? How are any payments made following a claim under a warranty or indemnity treated from a tax perspective? Are they subject to withholding taxes or taxable in the hands of the recipient?

  • 10.

    Restructuring
    What post-acquisition restructuring, if any, is typically carried out and why?

  • 11.

    Spin-offs
    Can tax neutral spin-offs of businesses be executed and, if so, can the net operating losses of the spun-off business be preserved? Is it possible to achieve a spin-off without triggering transfer taxes?

  • 12.

    Migration of residence
    Is it possible to migrate the residence of the acquisition company or target company from your jurisdiction without tax consequences?

  • 13.

    Interest and dividend payments
    Are interest and dividend payments made out of your jurisdiction subject to withholding taxes and, if so, at what rates? Are there domestic exemptions from these withholdings or are they treaty-dependent?

  • 14.

    Tax-efficient extraction of profits
    What other tax-efficient means are adopted for extracting profits from your jurisdiction?

  • 15.

    Disposals
    How are disposals most commonly carried out - a disposal of the business assets, the stock in the local company or stock in the foreign holding company?

  • 16.

    Disposals of stock
    Where the disposal is of stock in the local company by a non-resident company, will gains on disposal be exempt from tax? Are there special rules dealing with the disposal of stock in real property, energy and natural resource companies?

  • 17.

    Avoiding and deferring tax
    If a gain is taxable on the disposal either of the shares in the local company or of the business assets by the local company, are there any methods for deferring or avoiding the tax?

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CMS Hasche Sigle is one of the leading German commercial law firms. More than 600 lawyers serve their clients in nine major German commercial centres as well as in Brussels, Moscow and Shanghai.

View more information about CMS Hasche Sigle


Berlin
Lennéstraße 7
10785
Berlin
Germany
T: +49 30 203 600
F: +49 30 2 03 60 2000


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