Lewellen ¡]1971¡^ proposed merge and acquisition ¡]M&A¡^ activity will change the tax incentives when one enterprise reorganizes its capital structure. In 1986, the empirical evidences provided by Gilson ¡]1992¡^ proved that the Tax Reform Act in U.S. was not only a critical tax incentive in M&A activities but also a superior synergy to the firms. Besides, in Lewellen¡¦s assumption, the alterations of enterprise¡¦s capital structures are the crucial elements of its tax burden, not the tax law itself. That¡¦s why accounting principle cannot be omitted in the research of capital structure. The Financial Supervisory Commission announced Taiwan will apply International Financial Report Standard ¡]IFRS¡^ in 2013. Thus, the tax issues in M&A activities will be vital for the firms due to the upcoming revolution of accounting principle in Taiwan.
This document will list the tax incentives and risks after the implementation of IFRS in M&A activities. The tax incentives will not be the major motives in M&A transactions after the implementation of IFRS. If one enterprise actively manipulates the M&A activity for the tax benefits after the implementation of IFRS, the radical transaction will draw the National Tax Administration¡¦s attention and lose the goal of achieving better synergy after the M&A. Generally speaking, tax risks should be the dominant issues in M&A activities rather than the tax incentives.
Due to the complicity of the tax law, identification of tax risks will be the most difficult part in the risk management process. This research will propose the concept of the Tax Risk Matrix as an instrument to identify the tax risk. The matrix is composed with the nationality of enterprise, types of transactions and taxation. For example, once the nationality of enterprise and types of transactions are determined, using this matrix can assist the management concerned to identify what kinds of tax risks they might confront. When the risks are anticipated, this research also comes up with a standard operation process for those enterprises involved in M&A as a tool to control the tax risks.
For those complex and extensively different tax issues in the M&A transaction, the systematic methods proposed can decrease the tax risks for the firms. Moreover, the firms and the experts interested in M&A can also develop the best practical solutions with this process and bring up more propositions to the unreasonable and ambiguous articles in the tax law nowadays. In conclusion, the tax law should play a neutral role in the M&A activities not the favorable motives.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0728110-130314 |
| Date | 28 July 2010 |
| Creators | Lin, Yi-Chang |
| Contributors | Hsien-tang Tsai, LU, YUAN-YUAN, Tsuang Kuo |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0728110-130314 |
| Rights | not_available, Copyright information available at source archive |
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