Planning Ideals for the Modern Day International Corporate Merger or Reorganization
By Anthony Diosdi There are many good business reasons for corporate mergers or reorganization in the international context. Such transactions are commonly referred to as corporate “reorganizations,” “spin-offs,” “split-ups,” or “split-offs.” Generally, corporate mergers and corporate reorganizations are governed by Internal Revenue Code Sections 351, 368 and 355. The main benefit of meeting the requirements of Internal Revenue Code Sections 351, 368 and 355 in the domestic context, is that corporate mergers and reorganizations can be accomplished on a tax-free basis. A corporate merger or reorganization in the case of a multinational group raises difficult issues because Internal Revenue Code Sections 367 and 7874 (the inversion rules). This article discusses planning ideals to mitigate the impact of Section 367 in the context of a cross-border merger or reorganization. This article…