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CEO FORUM 2019 - 9th Breakfast Meeting

Cross Border Mergers and Tax Due-Diligence Impact Areas




8 - 10 am


Hotel Taj Gateway, Marine Drive, Ernakulam




The Cochin Chamber of Commerce and Industry conducted the CEO Forum’s 9th Breakfast Meeting on Friday, 6th of September, 2019 at the Taj Gateway Hotel, Ernakulam. 

Mr. V Venugopal, President of the Chamber, delivered the Welcome Address and introduced the Speaker for the meeting.


Mr. Alwar Rajkumar, Director, PwC’s Mergers & Acquisitions Tax Practice was the Guest Speaker at the meeting, and he spoke on ‘Cross Border Mergers and Tax Due-Diligence Impact Areas.’


Mr. Rajkumar addressed the forum on the key aspects of tax and regulatory namely foreign tax credit, eligibility, carry forward of losses, interest deductibility, reporting obligations, etc. He also explained the scope of work, key management representations, list of documents reviewed, a summary of issues, etc. which forms the typical format of a due diligence report.

The objectives of due diligence including how to identify any material Income Tax exposures, validation of representations made by the seller, how to efficiently structure a deal and validation of assumptions made by the buyer in valuing the target were also covered in detail. Mr. Rajkumar mentioned that financial statements, tax returns, transfer pricing documents, etc. are the typical documents reviewed in due diligence.

The session covered the difference between In-bound Merger and Out-bound Merger against the parameters like issue of shares, overseas liabilities, foreign branch regulations etc. Mr. Rajkumar presented case studies of a Parent Merger and Merger of a wholly-owned subsidiary. The key considerations of an outbound merger namely corporate law, Income Tax, SEBI regulations and exchange control were also discussed in the meeting.

India made it very flexible and it had opened the gates from March 2018 allowing any form of cross border mergers. If you look at cross border merger one needs to look at foreign jurisdictions. For example, Singapore doesn’t allow cross border merger. So one cannot do an inbound merger with Singapore since its not allowed under the Singapore Corporate Law regulation. Some developed nations like Japan, Australia where cross border merger is restruicted , unlike India which is open. Some of the favourable mergers is Mauritius merging with India, US with India. 

From a merger’s standpoint, there are set of tax and regulatory considerations which one needs to consider before a cross border merger. From a tax standpoint, most important thing is, is it a transaction which result in capital. Under the Indian tax laws, a merger between 2 Indian companies, there are 2 triggers. 

For cross border transaction, from India’s standpoint, an inbound merger will satisfy the condition. 


Mr. C S Kartha, Past President of the Chamber presented a Memento to Mr. Rajkumar.


Mr. S P Kamath, Executive Committee Member proposed the Vote of Thanks.