Acquisitions (from the buyer’s perspective)
1. Tax treatment of different acquisitions
What are the differences in tax treatment between an acquisition of stock in a company and the acquisition of business assets and liabilities?
There are significant differences in tax treatment between an acquisition of stock in a company and the acquisition of business assets and liabilities. The acquisition of stock triggers a 1 per cent tax (called tax on civil law actions (CLAT)), payable by the acquirer. The purchase price of stock cannot be depreciated after the acquisition, but becomes deductible in the event of the disposition of stock.
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