Draft Cross Border Acquisition Tax Memo

---
name: draft-cross-border-acquisition-tax-memo
task_id: tax/draft-cross-border-acquisition-tax-memo
description: A cross-border acquisition tax memorandum should analyze the tax consequences across all relevant jurisdictions in the deal structure, compare structural alternatives, and produce a risk matrix and action tracker alongside the narrative memo.
activates_for: [planner, solver, checker]
---

# Skill: Draft Cross-Border Acquisition Tax Memo

## 1. Subject-matter triage
- Map the transaction before analyzing tax: buyer, acquisition vehicle, target group, intermediate holdcos, operating subsidiaries, rollover sellers, and any post-closing migration steps.
- Enumerate the jurisdictions in scope first, then analyze each jurisdiction once on its own facts; do not collapse distinct entities, periods, or alternatives into one generalized treatment.
- Separate pre-closing structure, closing mechanics, and post-closing integration, because each may trigger different tax consequences and filing steps.

## 2. Failure modes the skill is correcting
- Producing only a narrative memo without the supporting cost model and action-item tracker when the assignment calls for coordinated deliverables.
- Overlooking intermediate holding companies, operating subsidiaries, branches, or other non-obvious entities that may face separate tax consequences.
- Applying one headline rate without accounting for supplementary taxes, local levies, withholding taxes, stamp or transfer taxes, or other items that change effective cost.
- Comparing only one structure variant instead of testing the principal acquisition alternatives actually available in the deal.
- Stating conclusions about exemptions, step-up, or gain recognition without tying them to the controlling rule or treaty position.
- Treating post-closing transfer pricing, disclosure, and integration steps as administrative afterthoughts rather than tax workstreams.
- Omitting a structured risk summary that lets the deal team prioritize issues by jurisdiction and mitigation path.

## 3. Legal frameworks / domain conventions that apply
- **Entity-by-entity tax mapping:** Identify each legal entity and its tax residence, branch status, and operating footprint before analyzing the transaction.
- **Deal-structure comparison:** Analyze the tax consequences of the principal acquisition forms relevant to the deal, including share acquisition, asset acquisition, and any locally recognized deemed-sale or reorganization alternative.
- **Corporate income tax and add-ons:** Determine the applicable corporate rate, then layer in surtaxes, local business taxes, municipal levies, transfer taxes, documentary charges, VAT/GST considerations where relevant, and withholding taxes.
- **Capital gains and basis consequences:** Address seller-level gain recognition, buyer basis step-up or carryover basis, asset depreciation consequences, and any exit-tax or built-in-gain exposure.
- **Participation exemption / dividend exemption / capital-gains exemption:** Test the conditions for exemption, including ownership thresholds, holding periods, subject-to-tax tests, active-business tests, and anti-abuse limitations.
- **Territorial versus worldwide systems:** Distinguish jurisdictions that tax local-source income only from those that tax worldwide income with credit or exemption relief, because that affects modeled cash cost.
- **Transfer pricing and intercompany flows:** Flag new or changed royalties, services, financing, cost-sharing, or IP arrangements that require contemporaneous support and documentation.
- **Mandatory disclosure and reporting:** Identify whether closing steps, restructuring steps, or financing steps may trigger disclosure, notification, filing, or beneficial-ownership reporting obligations.
- **Authority-based analysis:** Tie each tax conclusion to the governing statute, regulation, treaty article, administrative rule, or other controlling authority applicable to the jurisdiction.

## 4. Analytical scaffolds
- Start with a structure chart and a jurisdiction list.
- For each jurisdiction, analyze in a fixed sequence: tax residence and scope; direct acquisition tax cost; seller gain treatment; exemption or relief eligibility; transfer taxes and indirect taxes; withholding and financing implications; post-closing compliance items.
- Compare each feasible structure on the same assumptions so the deal team can see where cost, risk, and execution burden diverge.
- Where a conclusion depends on a condition, state the condition and the consequence if it is not met.
- Where the source package provides facts needed for a numeric model, use those facts in the workbook; if a fact is missing, flag it as an assumption rather than inventing it.
- Convert legal findings into deal implications: economics, timing, filings, documentation, and residual risk.
- End the memo with concrete next-step recommendations tied to a responsible role and timing anchor.

## 5. Vertical / structural / temporal relationships
- Trace how upstream ownership affects downstream tax outcomes, including dividend flows, exit taxation, and holding-period eligibility.
- Trace how pre-closing steps affect closing taxation and how closing choices affect post-closing integration, refinancing, and repatriation.
- Treat any contemplated post-closing merger, liquidation, IP migration, intercompany financing, or function transfer as a separate taxable event unless the governing rule clearly provides otherwise.
- If the deal package includes prior-period financials or entity-level reporting, use them to identify income concentration, financing flows, or cross-border payments that may change the tax analysis.
- Track jurisdictional interactions where one country’s exemption, credit, or withholding rule changes the result in another country.

## 6. Output structure conventions
- Deliver all requested files and ensure each file is substantive and non-empty: the memorandum, the tax cost model workbook, and the action-item tracker.
- Memo structure: executive summary; transaction and entity structure; jurisdiction-by-jurisdiction analysis; alternatives comparison; key risks; recommended actions.
- Use a clear risk table in the memo with a uniform ordinal severity field and a short rationale for each entry.
- Cost model structure: assumptions; jurisdiction inputs; scenario-by-scenario calculations; summary comparison; sensitivity or caveat section where assumptions drive outcome.
- Action-item tracker structure: open item; jurisdiction or workstream; owner; timing; status; dependency; note on why the item matters for signing or closing.
- Keep recommendations operational: use imperative verbs, identify the responsible role, and tie timing to signing, closing, post-close integration, or a stated deadline.
- Do not present a legal conclusion without naming the rule, treaty, or authority supporting it.