
An Introduction to the Taxation of the Modern Day Cross-Border Merger and Acquisition
By Anthony DiosdiIn today’s 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…