Restructurings of companies are ideally made from a position of economic strength to adapt to a changing market situation, due to a new ownership structure or after M&A activities (as post merger integrations). Often, however, the necessary corporate changes will only be made at a time when a loss situation has already occurred. In the latter case, particular tax considerations are required in order to not miss tax loss carryforwards.
Possible restructuring measures can result from outsourcing decisions, process optimisations or due to synergy effects. Any tax advice has to focus on the tax neutrality of the planned transaction. The taxation of hidden reserves must be avoided. Possible measures are:
- Mergers, splits, changes of the legal form or the contribution in kind (company shares) due to the regulations of the conversion (tax) law.
- Contribution of individual assets or (sub-) enterprises pursuant to § 6 (3) or (5) of the Income Tax Act.
- Use of fiscal consolidations prior to any reorganisation.
Another important aspect is the avoidance of real estate transfer tax due to a company reorganisation.
Company transactions / M&A services were often provided prior to the integration work decribed above:
- Tax due diligences
- Implementation of tax-optimized acquisition structures
- Adaption of a tax clause
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