Putting Deals through a Microscope | Traversing Transactions attempts at dissecting a deal by analyzing various aspects and nuances of an M&A Transaction, traversing through a complex mesh of Commercial, Regulatory, and Tax ("CRT") imperatives!
Putting Deals through a Microscope | Traversing Transactions attempts at dissecting a deal by analyzing various aspects and nuances of an M&A Transaction, traversing through a complex mesh of Commercial, Regulatory, and Tax ("CRT") imperatives!
Putting Deals through a Microscope | Traversing Transactions attempts at dissecting a deal by analyzing various aspects and nuances of an M&A Transaction, traversing through a complex mesh of Commercial, Regulatory, and Tax ("CRT") imperatives!
MoneyControl: Fast-track demergers for corporate restructuring face tax roadblocks
My take, as quoted in MoneyControl, on the inconsistency around tax neutrality in fast-track demergers:
“Intra-group mergers and demergers are routine corporate restructuring exercises that do not change beneficial ownership. Yet fast-track demergers are currently treated as taxable transfers.
There is a greater risk of tax incidence in the hands of shareholders, where it could be considered a deemed dividend taxed at 36% instead of capital gains taxed at 15%.
Unlike mergers, fast-track demergers currently do not enjoy tax neutrality, making otherwise genuine intra-group reorganisations commercially unviable.”
With fast-track demergers facing potential tax implications for companies and shareholders, there’s a clear need for alignment between corporate law and tax law in the upcoming Budget to preserve the utility of this efficient restructuring route.