Cross-Border M&A Is Hot, but There's a Trap for Tax PlannersAugust 31, 2015
Cross-border mergers and acquisitions are at their hottest pace since before the financial crisis. In fact, M&A volume was $1.10 trillion in 2014, up from $775.3 billion in 2013 and the highest since 2008. And intangible assets like intellectual property and goodwill play an increasingly large role in these transactions. However, there's a trap for corporate tax and financial planners, warns New York accounting firm Marks Paneth: Using the wrong method to value intangibles can raise red flags to tax authorities and lead to audits, penalties or regulatory actions, or to lengthy litigation.
"Tax planners need to understand the differences between the two methods and know which to apply -- the wrong choice can result in costly penalties and sanctions, or protracted litigation," says Angela Sadang, Director in the Financial Advisory Services group at Marks Paneth.
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