The information provided below is for reference only and does not constitute legal, tax or investment advice. In actual operations, professional accountants, tax consultants and legal advisors should be consulted to ensure that all arrangements comply with local laws, regulations and regulatory requirements. The following are some common ideas for achieving tax planning (rather than illegal tax evasion) through asset restructuring in corporate mergers: 1. Adopting non-cash (equity) exchange methods • In mergers and reorganizations, through equity (rather than cash) exchange structures, the "tax neutrality" conditions stipulated in tax laws can be met, and the immediate taxation of the added value of the original assets at the time of the merger can be delayed or avoided. • This arrangement generally requires both parties to meet certain conditions, such as the equity exchange ratio, the purpose of the restructuring, and the "continuous operation" requirements. After meeting the conditions stipulated by the State Council or the competent authorities, tax incentives can be enjoyed. 2. Continuation of the tax base of the original assets • Some countries and regions stipulate that in asset restructuring that meets the specified conditions, the tax base of the original assets can continue to be used in the new company to avoid double taxation due to repeated recognition of profits. • By reasonably arranging asset transfers and accounting treatments, the original cost basis of the assets can be maintained before and after the merger, thereby achieving tax deferral. 3. Spin-off and reorganization plan • In some cases, the overall tax burden can be reduced by splitting different business or asset units and then merging them into the target company respectively, with the help of loss deduction or asset portfolio optimization. • After the spin-off, each business will collect the original cost and tax base in a relatively independent manner. Reasonable planning can make profits and losses complement each other after the merger. 4. Valuation and revaluation arrangement • In the process of asset reorganization, professional valuation of relevant assets is carried out, and the assets are evaluated and revalued within the scope permitted by tax laws. Sometimes, the purpose of tax optimization can be achieved by reasonably adjusting the book value of assets. • It should be noted that the independence of the valuation agency, the valuation method and the authenticity of the declaration are all matters that the tax authorities focus on and must be strictly followed. 5. Take advantage of regional policies and preferential policies • In some regions, the government will grant certain tax incentives or tax deferral policies to corporate restructuring and mergers and acquisitions within its jurisdiction. • Enterprises can optimize their overall tax burden by choosing to implement restructuring plans in these regions and taking advantage of local policy advantages. Important tips: • Any asset restructuring plan must be carried out under the risk of being identified as an abuse of tax incentives or illegal tax avoidance, and must strictly comply with tax laws, anti-tax avoidance rules and regulatory requirements. • The compliance requirements of some arrangements may vary in different jurisdictions, and you must fully understand the specific laws and regulations of the relevant countries or regions before taking action. • Most of the above methods are part of tax planning, and the purpose is to take advantage of preferential policies and reasonable arrangements within the legal framework, rather than to engage in illegal tax evasion. In short, the key to a company's tax planning through asset restructuring during the merger process is to reasonably design the corporate structure, ensure that the plan is legal and compliant, make good use of policy incentives, and seek professional guidance when necessary to achieve the purpose of financial optimization and tax management.