Tax On Inbound Investments 2020

ACQUISITIONS (FROM THE BUYER'S PERSPECTIVE)

Tax treatment of different acquisitions

1. What are the differences in tax treatment between an acquisition of stock in a company and the acquisition of business assets and liabilities?

Both the seller and the acquirer face different tax implications depending on whether an acquisition is carried out by way of acquisition of stock (share deal) or acquisition of business assets and liabilities (asset deal).

The main differences concern the tax treatment of capital gains, respectively realised income on the transfer of assets, transfer of historic tax liabilities, step-up in basis of the target's underlying assets, transfer of the tax loss carry-forward and transaction taxes.