2016 was an active year for global mergers and acquisitions (M&A), although by most measures total activity backed off slightly from the records set in 2015. 2017 has begun with deal volumes consistent with early 2016, both in terms of the total number of deals as well as overall volume.
The year saw significant developments in international tax rules, led by the OECD’s Base Erosion and Profit Shifting (BEPS) initiatives. There is near unanimous support among governments worldwide for the basic premise of the BEPS programme: that international cooperation is necessary to control the erosion of tax revenues attributable to highly structured transactions. The trend toward narrowing the scope, though not the importance, of M&A tax planning is expected to continue.
Stepping back from short-term market fluctuations, certain truths about the future come into focus. First, business growth, and therefore M&A, will continue to be driven by technological innovation. The pace of development of new and valuable technologies has not slowed. M&A is simply another term for the invisible hand of market economics, which dictate that value will seek out its most profitable avenue of growth as surely as water flows downhill.
Second, and as a corollary, information of all kinds will continue to spread farther and more rapidly than ever in the past. Technology improves communication, and the sharing of information and ideas improves technology. This is a virtuous cycle that has improved the lives and fortunes of billions, and of its own force will continue to do so.
Third, business and industry are not constrained by national borders or parochial regulation. BEPS is one manifestation of this fact. The growing level of cooperation among governments makes it essential for businesses and their advisors to also consider their growth and future profitability from a global perspective.
This edition of the Taxand Global Guide to M&A Tax has been designed as a desktop reference book covering 37 countries. Like its predecessors, it provides at-a-glance insight into the tax treatment of mergers and acquisitions worldwide. It is intended to facilitate interaction within global planning teams by providing a basic introduction to M&A planning in each of the widely diverse fiscal environments in its scope. It is not an encyclopedia, but a phrasebook that should help multinational advisors find common ground and mutual understanding.
National Taxand teams in each of the covered jurisdictions made essential and invaluable contributions to this book. We are grateful for their participation and support in this project. We are pleased to offer this volume as an example of the benefits cross-border cooperation can provide.
Author: Christopher Howe, Managing Director, Alvarez and Marsal Taxand