Grensoverschrijdende M&A
Cross-Border M&A
Cross-border mergers and acquisitions involve complex tax considerations spanning multiple jurisdictions. Structuring the transaction correctly is critical to achieving tax efficiency while maintaining compliance with anti-avoidance rules.
Share vs Asset Deals
The fundamental structuring decision in any acquisition is whether to acquire shares (equity) or assets. Each approach carries distinct tax implications for both buyer and seller.
Share Deals
The buyer acquires the target company's shares. The target retains its historical tax attributes, including carry-forward losses and asset bases. Capital gains on share disposal may benefit from participation exemptions.
Asset Deals
The buyer acquires individual assets and liabilities. This typically provides a step-up in the tax base of acquired assets, generating higher depreciation deductions. However, the seller may face immediate tax on the gain.
Merger Directive
EU Directive 2009/133/EC (the Merger Directive) provides for tax-neutral treatment of certain cross-border restructurings within the EU. It covers mergers, divisions, transfers of assets, and exchanges of shares between companies of different Member States.
Under the Directive, capital gains arising from the restructuring are deferred rather than immediately taxed, provided the receiving company maintains the historical tax values of the transferred assets and the restructuring has valid economic motives.
Capital Gains on Share Disposals
Article 13 of the OECD Model Tax Convention governs the allocation of taxing rights over capital gains. In the M&A context, the key question is which jurisdiction may tax the gain on disposal of shares.
Generally, gains from the alienation of shares are taxable only in the seller's state of residence. However, Article 13(4) provides an exception for shares deriving more than 50% of their value from immovable property — such gains may be taxed in the state where the property is situated.
Tax Due Diligence
Comprehensive tax due diligence is essential in cross-border acquisitions. Key areas of focus include:
Historical Tax Positions
Review of filed returns, open assessments, ongoing audits, and pending disputes across all jurisdictions.
Transfer Pricing
Assessment of intercompany pricing policies, documentation, and potential adjustment exposure.
PE Risk
Evaluation of whether the target's activities create undisclosed permanent establishments in other jurisdictions.
Latent Liabilities
Identification of contingent tax liabilities including tax indemnity provisions, change-of-control clauses, and recapture risks.
Post-Acquisition Restructuring
After completion, the acquirer typically undertakes integration and restructuring to align the target within the group's operating and tax structure. Key considerations include asset step-up opportunities, debt push-down financing, and the preservation or utilization of tax losses.
Post-acquisition restructurings must be carefully timed and documented. Anti-avoidance rules — including general anti-abuse provisions, CFC rules, and interest limitation rules — may constrain restructuring options.
Key requirement
The Merger Directive requires genuine economic motives — tax avoidance as a principal objective may disqualify the restructuring from tax-neutral treatment.