Tax and Legal Restructuring Services
Key considerations under restructuring
Tax considerations while planning a restructuring include:
Interest deductibility
Optimizing tax deductibility of interest expenses in light of
limitations on such deductions introduced in response to base
erosion and profit shifting (BEPS).
Taxes on disposals of assets
Determination of capital gains taxes, income taxes and transfer
taxes arising when assets are disposed of or transferred.
Determining the unexpected or unnecessary tax liabilities
arising out of restructuring.
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Debt forgiveness/amendment
Analyzing the relevant exemptions that may be available
across a number of jurisdictions.
Taxable credits can arise where debt is forgiven or amended.
Withholding taxes
Cash repatriation across various countries/jurisdictions, require
withholding taxes to be considered subject to treaty analysis.
Withholding taxes may also be due on deemed payments.
Tax attributes
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Tax attributes such as losses and accumulated tax depreciation
may be lost or restricted on a change of ownership.
Analyzing the restricting use of broughtforward losses.
Secondary liabilities
Understanding the secondary liabilities when acquiring
distressed companies.
Evaluating outstanding debts against associated parties.
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Country/jurisdiction specific considerations
Due to the changes in tax legislation across countries/
jurisdictions, local advice should always be sought to ensure
the key provisions relevant to each location are analyzed and
managed appropriately.
5 Tax and Legal Restructuring Services
Tax status in insolvency
Income received by companies in insolvency is often taxed
differently and relief for expenses may be limited.
Under insolvency, it can trigger tax charges.
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