Merger Acquisition Newsroom

Federal Income Tax Code And Regulation For Mergers

Revision of Income Tax Regulations under Sections 367, 884 and 6038B dealing with Statutory Mergers or Consolidations under Section 368(a)(1)(A)

A final regulation is being published that would provide certain international tax rules to account for statutory mergers and consolidations effected pursuant to foreign law involving one or more foreign corporations.  A companion final regulation provides that certain statutory mergers and consolidations will qualify for tax-exempt treatment if they are affected pursuant to foreign law.  In light of this change to the treatment of statutory mergers and consolidations, this document contains amendments to the international tax regulations that would account for statutory mergers and consolidations under foreign law.  TD 9243.

Statutory Mergers and Consolidations

These final regulations define the term statutory merger or consolidation as used in the Internal Revenue Code.  These final regulations remove the requirement in temporary regulations that transactions must be carried out under domestic law in order to qualify as a statutory merger or consolidation.  These regulations also provide that a transaction may qualify even if it involves foreign entities.  These regulations also provide a special rule that addresses the qualification as a statutory merger or consolidation of a transaction involving certain entities that are disregarded as entities separate from their corporate owners for Federal income tax purposes.