A Study on Tax Planning in Merger and Acquisition

Abstract

Mergers and Acquisitions (M&A) play a significant role in modern corporate restructuring. Taxation and its influence on M&A decisions are critical factors in this process. This study explores the impact of taxation on M&A activities in Country D, using the acquisition of XYZ Energy Limited by ABC Corporation as a case study. A qualitative research approach was adopted, employing purposive sampling and documentary review methods. Additionally, content analysis was conducted to provide a thorough interpretation of the findings. The study reveals a positive relationship between taxation and M&A decisions, highlighting taxation as a key factor in determining whether a merger or acquisition should proceed. The results also indicate that factors such as law enforcement, frequent tax audits, penalties, and prosecutions significantly influence business expansion strategies. Furthermore, M&A decisions serve as a fundamental pathway for business growth among many entities. The findings also suggest that enhancing the capacity of tax officials to interpret tax laws and analyze M&A-related information alongside regular reviews of tax regulations can help reduce tax evasion risks. These improvements are likely to strengthen tax compliance and ultimately increase government revenue collection.