An Introduction to the Taxation of the Modern Day Cross-Border Merger and Acquisition

An Introduction to the Taxation of the Modern Day Cross-Border Merger and Acquisition

Tax Law
By Anthony DiosdiIn today‚Äôs global economy, corporations have operations all over the world. Typically, a U.S. parent corporation owns a group of subsidiary corporations formed within and outside the United States. In such a scenario, the foreign subsidiaries are largely held by one foreign parent corporation. In larger multinational corporations, frequently there are multiple foreign parent corporations. A corporate reorganization in the case of such multinational groups raises a plethora of issues both for the corporations and shareholders involved, including the following that must be considered: 1. Whether the chosen method of reorganization will trigger any adverse U.S. tax consequences. Section 367 of the Internal Revenue Code adds an additional layer of complexity that must be considered in the context of cross-border corporate reorganizations. 2. Whether there are planning methods…
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Cross-Border Taxation of the Digital Economy

Cross-Border Taxation of the Digital Economy

Tax Law
By Anthony Diosdi Introduction and Summary of the Law Governing Digital TransactionsNew technology and new transactions often raise difficult issues of tax policy and administration. The dramatic expansion of electronic commerce facilitated by the use of the Internet and other technology is subjecting existing tax principles to new pressures. One area of concern is the application of source rules to electronic commerce transactions. Suppose, for example, that a corporation delivers electronically software or a digital product to a customer on the Internet. The customer can download the product and use it commercially. Depending upon the nature of the transaction and the property interests involved, the income to the corporation might appropriately be characterized as a royalty for the use of technology, profit from the sale of a product or a…
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