M&A Tax Services

Sorting Tax assists you in enhancing your corporate value by serving as a trustworthy professional counsel for M&A, foreign investment and corporate restructuring. We offer tailor-made advisory and consulting services as per your needs, and ensure that the vast experience and in-depth knowledge of our in-house experts are fully leveraged to offer solutions on all M&A tax-related issues so that you can navigate the turbulent industry and thrive.

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Mergers & Acquisition

Sorting Tax Advisory Services Private Limited is a firm of specialized experts in the field of Mergers & Acquisition Tax Services. Hence, we extend our professional assistance to help you navigate through the complexities of tax compliance. Here we are committed to providing you with the necessary guidance and support to meet your tax compliance requirements. We provide comprehensive tax services for mergers and acquisitions. Mergers and acquisitions are complex transactions that require careful planning and execution to ensure maximum value and ascertaining right tax liability. Our team of experienced tax professionals dedicatedly provides expert guidance and assistance throughout the entire M&A process, from due diligence to post-transaction integration. We understand that every M&A transaction is unique and requires a tailored approach to tax planning and compliance. With our in-depth knowledge of tax laws and regulations, we can help our clients navigate the complexities of M&A taxation and achieve their goals.

Mergers and acquisitions can be complex and challenging transactions. Our team of M&A experts can provide:-

• Corporate Structuring• Inbound Investment
• Outbound Investment• Succession Planning
• Post Transaction Services• Foreign Direct Investment

We also provide specialized services in different sectors of taxation including income tax servicesInternational Tax ServicesUAE Corporate Tax.

Services

Services that we cover under M&A Tax

Corporate Restructuring

We provide various alternatives to restructure your business and bring in efficiencies through the following (within the legal framework) –

  • Tax optimization of loss-making entities through amalgamation/merger;
  • Separating business units for raising funds through Demerger, Slump Sale, Itemised Sale and Optimising Tax Losses etc.
  • Reducing multiple entities through amalgamation thereby saving on compliance cost;
  • Exploring areas for reducing Effective Tax Rate (“ETR”).
  • Drafting schemes for Share capital Reduction and Buy Back of shares
Corporate Restructuring
Inbound Investment

Inbound Investment

Identifying tax implications of various structures of investing in India by foreign companies, with specific emphasis on: –

  • Capital Structure Planning;
  • Acquisition Structure, if any;
  • Impact of tax on Business Model;
  • Profit/Cash repatriation, Exit from Indian company/Overseas investment vehicles;
  • Implications on other related parties and other transaction.

Outbound Investment

This is a business strategy where domestic businesses expand their operations to foreign countries. To achieve this, we:

  • Provide advise on overseas investment strategies and developing the investment framework as per the domestic regulatory regime in various jurisdictions;
  • Assist regarding business structuring of corporate entities, capital restructuring and adhering with compliance regimes;
  • Identify tax and fiscal incentives;
  • Assist in claiming tax credit and any other tax compliance requirement from the concerned regulatory authorities;
  • Provide advise regarding the various tax implications under the respective tax treaties.
Outbound Investment
Succession Planning

Succession Planning

  • Selecting the right investment vehicle for smooth transition of wealth between different generations;
  • Defining rights of various parties, and conditions contingent on which such rights can be exercised

Post-Transaction Services

We assist you in Regulatory as well as tax compliance and breaking down complex statutes on corporate tax restructuring.

Post-Transaction Services
Foreign Direct Investment (FDI)

Foreign Direct Investment (FDI)

Foreign Direct Investment (FDI) is considered as a major source of non-debt financial resources for economic development of a nation. There are various aspects involved in Foreign Direct Investment in India where our team can assist you, like:

  • Conduct extensive market-research and suggest sectors where investment can be made;
  • Obtain relevant approvals concerned regulatory authorities and related nuances.

FAQs

Most frequent questions and answers

Mergers and acquisitions are instruments that establish relationships between two or more business entities and are a key factor in determining business strategy.

In this fast-paced world where digitalisation is leading our global age, the world has become a smaller and a more competitive place. This is more so in the case of a developing nation like India.

Creation of new markets or expanding old ones or even adapting to the existing ones, whether it be one or the other, businesses have to enter into transactions with other enterprises i.e., via mergers, acquisitions, amalgamations, takeovers or business restructuring.

They help enterprises in:

  • establishing new markets;
  • penetrating existing markets;
  • cut out competition;
  • build strength;
  • get a market share
  • enter existing markets with established brand recognition;
  • expanding existing customer base;
  • reduce tax liabilities i.e., effective tax planning;

and many other benefits arise when one enters into these agreements.

As per Bain & Company’s Report 2022, Mergers and Acquisitions in India have picked up a steady pace, so much so that it acted as a boost of confidence for new entities, who boast for up to 80% of the total share of Mergers and Acquisitions in India in 2020-2021. This is a stark increase in the number of deals crossed, almost a 70% spike than the 2017-2019 period.

  • Companies (Compromises, Arrangements and Amalgamations) Rules, 2020
  • Companies Act, 2013
  • Foreign Exchange Management Act, 1999
  • Competition Act, 2002
  • Income Tax Act, 1961
  • Insolvency and Bankruptcy Code, 2016
  • Indian Stamp Duty Act, 1899
  • SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 2011
  • Section 2(1B) of the Income Tax Act, 1961 defines amalgamation as the merger of one or more companies with one or more companies to form one single new All assets and liabilities previously belonging to the companies now belong to the newly merged entity. The company existing before the merger lose their identity to assume the identity of the newly formed business entity.

There are two types of amalgamation agreements, companies can enter into:

  • Amalgamation in the nature of Merger
  • Amalgamation in the nature of Purchase

It is an agreement that merges two existing companies into one entity. In this case, a new entity may or may not be formed. If a new entity is formed, it is called an ‘amalgamation’ and if the companies merge into an existing company it is called ‘absorption’.

There are different types of mergers which include:

  • Horizontal Merger-Between companies dealing with the same product (Purpose: Reduces competition).
  • Vertical Merger-Between companies who are part of the same product chain, but operate at different stages of it. (Purpose: Diversification)
  • Conglomerate Mergers– Between two or more companies who are unrelated and do not operate in the same industry (Purpose- Diversification).
  • Congeneric Mergers– Companies serve same customer base and their but operate in different industries.

Here are some examples of the various types of mergers that have been defined above:

  • Horizontal Merger

Example: PVR Cinemas and INOX Merger

  • Vertical Merger

Example: Walt Disney Company and Pixar Animation Studios

  • Conglomerate Mergers

Example: Walt Disney Company and ABC

  • Congeneric Mergers

Example: Coke and Vitamin Water