Tax services on M & A and restructuring

Tax advisory on deal structure and arrangements

Through mergers/acquisitions or internal restructurings, a company may achieve better allocation of resources, enhanced competitiveness and maximized business value. However, it should be noted that there could be complex tax risks in such M&A and restructuring activities. To a certain extent, properly planning and controlling of such potential tax risks may depend whether the M&A or restructuring process can achieve success. In this regard, we are experienced to provide tax advisory services to our clients regarding the deal structure and arrangements, including negotiation support from the finance and tax perspectives. For example:

  • What is the previous tax compliance status of the company? Whether such issue will attract the attention of the tax authorities and affect the M&A or restructuring process? What practical measures are necessary to deal with the historical tax compliance problems (usually identified through tax due diligence or internal tax health check before the deal)?
  • The M&A or restructuring transactions are driven by what factors, and what are the (operational, financial or tax) objectives to be achieved What will be the post-deal holding structure or operation model (“Target Structure”) that can maximize the overall tax efficiency?
  • To achieve the above Target Structure, what transaction steps are needed and what authority approval/registration procedures are involved

Tax due diligence and internal tax health check

Generally, tax authorities will strictly scrutinize the relevant companies’ previous tax compliance status, especially for the companies that will be de-registered, merged or relocated during the M&A or restructuring process. On the other hand, the relevant companies’ financial status and tax treatment in relation to their previous operations may also affect the tax treatment of the M&A and restructuring transactions. Therefore, it is recommended to conduct a systematic tax due diligence or internal tax health check on the corresponding companies before implementing the M&A or restructuring transactions, in order to:
  • Identify potential tax risks for timely handling, by adopting different approaches under different circumstances
  • Explore potential tax planning opportunities: reviewing the companies’ previous financial and tax issues will be helpful to explore their potential tax planning opportunities, with regards to the M&A/restructuring transactions, or long-term tax benefits post deal


We have helped many clients to conduct such tax due diligence or internal tax health check.

Improvement of tax internal controls

An effective tax internal control system can facilitate a company’s tax compliance, minimize potential tax risks and identify possible tax planning opportunities on a timely basis. Actually, Chinese tax authorities have been requiring and guiding enterprises to improve in such areas. By referring to the similar experiences of many developed countries, increasingly higher requirements on a company’s tax internal control system is an evitable trend of China’s tax administration regime.In view of the above, we are able to provide various advisory and implementation assistance services to our clients, based on our in-depth analysis of tax regulations, timely understanding of tax authorities’ detailed requirements and practice, as well as the “best practice” of other companies.

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Tel:+86(21)6135 6268
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