The Japanese tax system is in a state of rapid development. Taxpayers are faced with many rule changes and overhauls of the tax system, especially in respect of international taxation and M&A. As a result, investors and corporations need to be on high alert for structuring opportunities and pitfalls. Tax costs can significantly differ depending on the method of structuring of a transaction.
Our Transaction Tax professionals help you navigate the tax implications of your transaction. We assemble an integrated global team to work with you to mitigate risk and enhance opportunity. We can suggest structuring alternatives to balance investor sensitivities, promote exit readiness and raise opportunities for improved returns.
Our professionals have a detailed understanding of the corporate restructuring tax rules (including triangular mergers and spinoffs), the Civil Rehabilitation Law and the Corporate Reorganization Law. We review transactional issues, such as registration and consumption taxes. We provide our clients a full range of tax services relating to transactions and work closely with them throughout the transaction life cycle (from the initial due diligence to the implementation of plans for acquisition structure and post-merger integration), including reviewing the transaction documentation and obtaining tax rulings from relevant tax authorities.
Our integrated approach means you gain access to high-quality, globally coordinated tax advice, wherever your transaction occurs. It’s how Ernst & Young makes a difference.
Our services include:
- Tax due diligence
Our Transaction Tax professionals provide tax due diligence services to analyze the tax position and potential tax exposures of a target company or business. Such information can influence investment evaluations and decisions significantly. Tax information collected through tax due diligence reviews is essential in planning and putting together successful M&A transactions.
- Tax structuring advisory for M&A transactions and internal reorganizations
Japan domestic and cross-border M&A transactions and increasingly internal reorganizations are becoming more complex and diverse, particularly in the current economic climate. Our tax professionals present creative tax advice and post-transaction restructuring options that respond to our clients’ business requirements and objectives.
- Tax modeling of transactions
To be successful, M&A transaction planning should minimize tax-related costs while maximizing future cash flow. Our tax professionals are experienced in preparing tax consequence simulation models of acquisition structures with respect to acquisition financing, including post-transaction restructuring modeling and showing expected future cash flows.
- Fund-related tax structuring
Each fund (real estate, private equity and hedge funds) requires specific tax structuring depending on the investment it is pursuing. Our tax professionals are experienced in both fund and fund acquisition structuring and have an intimate knowledge of the business and tax issues relevant to these various types of fund investors.
- Tax evaluations necessary for reorganizations
It is important that transactions like share transfers, new share allocations to third parties, business transfers and organizational restructuring are executed at appropriate values. Transactions between related parties or within a corporate group in particular will be carefully reviewed by tax authorities. Our team will provide advice that carefully considers these valuation aspects.