Many companies have used mergers and acquisitions (M&A) as a growth strategy to assist the organisations in winning the race to grow its market share, seize new opportunities, improve existing services, and consolidate their leading position in their respective markets.
However, it is important for business owners to be aware that in order to maximise value and cash flow in the midst of rapidly changing plans for acquisition and consolidation, it is necessary to have a complete tax strategy as well as tax-focused analysis and modelling of any potential agreements.
In this post, we will discuss the pertinent tax challenges that arise in merger and acquisition companies in Malaysia, as well as how a tax firm in KL or tax firm in Penang, Malaysia may assist a company resolving any tax issues it may be facing.
The Challenges Commonly Faced by Malaysian Merger and Acquisition Company
Challenges 1: Limitation of Merger and Acquisition Management and Help
There is a high volume of M&A activity, which, combined with issues like fair competition and a lack of confidence between stakeholders, provides little room for the tax department to give the strategic analysis that informs and leads M&A choices.
Challenges 2: Dealing with Unpredictable R&D Costs
It is not a simple matter to resolve the tax concerns that arise from global R&D investment and acquisitions. Due to its complexity and the fact that it, along with many other areas of tax planning and compliance, require planning and research, companies need to be guided by an experienced tax firm in Penang in the proper direction in order to make decisions that are tax-optimized.
Challenges 3: Higher Marginal Tax Rates
Tax has significantly increased the costs of doing business while also contributing to misunderstanding regarding the services that are subject to the tax. Companies are also implementing a turnover tax, which means that they would be taxed on their total revenues rather than their net income. And because of this, low-profit companies run the risk of being subjected to higher marginal tax rates.
There are other industry-specific tax issues that companies should be aware of when engaging in M&A in order to comply with the law. For this reason, businesses must keep ahead of changes to tax regulations and maintain voluntary compliance by seeking advice from any KL, Penang, or other state-based tax firm.
Contact Ecovis, a Tax Firm in KL for Guidance, Now!
If you are a business owner who is concerned about the potential tax implications for your merger and acquisition company in Malaysia, as well as the complexity of tax regulations, please contact Ecovis! We are the top expert tax firm in KL that offers Malaysian tax related consultancy services. Furthermore, we are a tax firm in Penang, so if you are looking for a tax firm in Penang, the branches will be much closer to you! Click here for more info!
