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Tax Specialist Group
Service Areas: Corporate Services

Sale of a Group, Division or Subsidiary

From time to time, corporate multi-national clients divest themselves of a company, division, or a group of companies. In many cases, it may be possible to arrange for a share sale without tax, utilizing what is commonly referred to as the "participation exemption".

Local assistance will be needed in order to minimize tax in the jurisdictions where entities are being sold. In addition, international tax assistance may be necessary to determine whether and how an exemption may apply to capital gains. Lastly, advice will be required in the home country jurisdiction with respect to the tax treatment to the parent company of repatriating profits which arise.

ITSG members can advise on creative approaches to structuring a sale, such as an earnout, a management buyout, a share-for-share exchange, a sale and leaseback transaction, and a subsidiary public offering.

Local advice can also be provided as to any other taxes which might apply to the transaction (such as capital tax, stamp duty, etc.).

In addition to planning the overall divestiture transaction, ITSG members can design the specific transactions which are required to effect the tax planning, assist with reviewing the legal documentation, assist with negotiating the terms of sale, with particular emphasis to the tax issues which are involved, and complete or review any necessary tax filings and elections.

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