Fenwick international corporate tax partner David Forst was quoted by Corporate Counsel on the legal and business needs of companies looking to do mergers, acquisitions and other global transactions.
International tax planning involves both defensive and offensive components, Forst said while participating on a panel looking at key challenges in cross-border transactions.
“On the defense side, make sure you are not taxed twice on the same income,” Forst advised. “So if you are doing an international deal in, say, Germany, make sure both countries won’t tax you.” That could require working with local counsel and reconsidering how the deal is structured, he added.
On the offensive side, Forst said most companies want to see if they can improve their tax situation, which could involve conducting operations in a jurisdiction with lower tax rates than the U.S.
He said in several countries, including the Netherlands, Switzerland and Singapore, a company can negotiate for lower tax rates by providing other incentives, like higher employment. In other countries, like China, India and some places in South America, he said: “It’s more difficult to just open up a law book and find an answer to your tax questions. Who you know can be as important as what tax laws you know.”
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