TAX Implications ARISING FROM Mergers And Acquisitions – AN INVESTIGATION OF Australian Firm
AMNA TARIQ SHAH AND KEN DEVOS
Abstract
The tax and accounting literature indicates that mergers and acquisitions (M&As) have not
been predominant in Australia until recently, but there is strong overseas evidence that
suggests that this course of action can have significant tax implications. This paper
investigates the presence, if any, of potential tax advantages obtained by Australian-based
firms through M&A deals. Ninety-seven observations, comprising M&A deals completed
between 2005 and 2015, were investigated to statistically support and explain the potential
link between M&A decisions and certain corporate tax advantages gained. The findings
suggest that when firms make profit-maximising decisions as part of an M&A deal, a
potential reduction in tax can transpire from such transactions.