Navigating Tax Risks in Global M&A
The COVID-19 pandemic has created an unprecedented disruption to the world economy and the public at large. We have seen some of the world’s most developed countries getting badly hit by the pandemic – socially, financially, and economically despite having the advanced infrastructure and healthcare systems! Further, this chaotic situation would continue even after COVID-19 is overdue too:
- Global lockdown for two or more months in most of the cities or countries;
- No buyers despite oil prices seeing bottom levels resulting in economic shock for the global economy;
- The travel ban, borders being sealed, sports and other social events being canceled for indefinite times, the volatile situation in stock and bullion markets, etc. and probably this would continue for another two years as fear continues;
- Pharmaceutical giants, World Science University professors struggling with the invention of full proof medicine to treat the COVID patients and future of anti-COVID vaccine being uncertain at-least for next 6 months from now; and
- Countries offering stimulus financial packages beyond annual planned budgets to repair the economy in testing time, and no one is certain about the future of their treasury surplus.
Due to all these factors, estimates vastly vary on how soon things will stabilize, and we could see recovery. Many countries have already announced a downward projection in their growth estimates, some economies are clearly in a negative zone and world on the edge of a bigger recession than the last few decades’.
After our Navigating taxes in Financial transactions & Business Restructuring, we pen down now on how to navigate taxes in global M&A. On M&A front, whether it being a domestic or an international transaction, whether you are an investor, target, existing management team member of target or consultant, review your term sheets, contracts, terms of association and valuation principle adopted for negotiation, specific deadlock provisions as well as carve-outs and take note of legal, commercial as well as tax consequences before it’s too late, as ignorance can expose you to enormous risk.
The guide covers-
- Challenges due to changes in Valuation and Business perception
- How InCorp can help you