Transparent Transactions: How It Transforms Mergers

Transparent Transactions: How It Transforms Mergers

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With corporate law being her expertise, Minerva Bellorin shares her thoughts on the importance of transparent transactions in law.

What do you think is the best way to determine the balance between compliance and upholding value, in regard to company tax?

According to my perception, in the last decade we have been changing and transforming our way of thinking about the duties and obligations that we as taxpayers must fulfill as stated by our legislation for the payment of our taxes. The culture and awareness of the duty to comply with the payment of taxes is increasingly positive. We have seen a positive balance between the payment of our taxes versus the utility and reinvestment. It can be seen at a glance in which our taxes have been reinvested. This makes us more aware and satisfied, that there is a return of state services: we see investment in infrastructure, water and sanitation, electricity, telecommunications, hospitals, health services, education and all over the social area.


Are there any particular changes or ventures you are excited to witness in 2018?

Yes, BEPS: Base Erotion and Profit Shifting, against the erosion of the tax base and the transfer of benefits is the current issue. It will be in March this year that companies must submit for the first time their TP studies along with their declaration and annual payment of taxes for the year 2017.

With all agreements at the OCDE level, it will be possible to eventually harmonise tax regulations from a global perspective to solve the needs and concerns of international tax and cross border tax, which will bring positive results, benefiting taxpayers fairly, such as avoiding double taxation, being able to access greater knowledge, exchange of experiences among tax administrations with the consequent achievement of strengthening the actors that implement and execute the application of substantive rules on tax matters; to acquire and strengthen an application of the norm in a standardised, equitable, compatible and fair manner.


What aspects must be considering when re-organising cross border transactions? What challenges arise during this?

Two essential elements must be kept in mind from my perspective:

 1. How the world looks at these transactions that involve different jurisdictions, what the gaps are in the local norm, and that in some cases the taxpayers take advantage of that gap to find a way to evade taxes or do not pay what corresponds; and

2. Analyse the fiscal impact and legal implications, economic links in the different jurisdictions where the transaction will have fiscal and financial impact, since it should not be forgotten that there are many mechanisms and tools and even controls ranging from regulations in banking institutions and financial, agreements and treaties between countries on tax issues for information exchange.

The BEPS issue that although they are voluntary agreements, when a reorganisation and cross-border transaction takes place, will involve one or more jurisdictions that have probably adopted these agreements to combat the displacement of benefits and erosion in relation to taxes whose declaration and transparent payment you want to hide or minimize to reduce the burden of the tax or not pay in the corresponding jurisdiction.

I would recommend setting up a transaction that is the least onerous but transparent and defensible fiscally based on the applicable legal system without taking advantage of the gap that may exist in each legal system.


As Thought Leader, can you share key aspects every company must consider when merging or acquiring another company?

The following are important to consider: The BEPS; the fiscal impact in the jurisdictions that it involves; transactions and financial results; transfer prices between related parties; legal implications according to the jurisdictions that are considered transparent and to comply with the agreements, and involving entities considered transparent in fulfilling their obligations among other important aspects.

In addition to the elements that I have already mentioned in the previous answers, transparency in the structuring of the merger should be taken into account, from the fiscal point of view and in relation to the controls of fund management and legal implications. New controls are increasingly emerging for other reasons, such as the prevention and laundering of money (source of funds), etc. Therefore, a merger must be based and structured on solid and transparent bases from every angle.


Minerva Bellorin

Colonial Los Robles, V Etapa #26. Plaza El Sol 2c. al Sur y 1c. al este. Managua, Nicaragua 

(505) 22705976 – 22705186;



Minerva Bellorin specialises in Corporate and Business Law, Tax and labour structures, joint ventures and franchising, real estate, telecommunications (regulatory matters, permits, negotiations with regulatory authorities), intellectual and industrial property. She was Cofounder and Partner of Aczalaw Abogados Centroamericanos.

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