Paul Schmidt Discusses Implications of Proposed Tax Changes on Cross-Border M&A

News / June 9, 2001

Chairman Paul Schmidt is quoted in an article that was published by Mergermarket on June 9, 2021. The article, “Biden’s Taxiing Complications to Cross Border M&A,” discusses the Treasury Department’s call for raising taxes on corporate income through

higher tax rates and restrictions on a range of strategies companies use to reduce the amount of their overseas earnings that is taxable in the United States.

Schmidt told the publication that the proposal could give a leg up to a foreign company competing with a domestic group to buy a smaller U.S. target with a substantial

international presence. “You could say look from a tax perspective we will be able to acquire you and not be subjected to these extra rules and therefore ultimately, we can bid higher for a target in the U.S. because the after-tax costs could be lower.” Conversely, he said, domestic companies will have less incentive to acquire asset-heavy targets overseas since the proposal eliminates a tax exemption on the first 10% return on foreign tangible property.

Read the article (registration required).

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