A primer on infrastructure M&A and related US tax considerations

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As the requirements for U.S. infrastructure investment continue to grow in the coming years, many investors are considering investing in this space. There are complex and inter-related U.S. tax considerations that arise when considering infrastructure transactions and investments. The relevant U.S. tax determinations may turn on various qualitative and quantitative factors that can vary greatly by transaction. This primer introduces these key issues and demonstrates the role that careful U.S. tax planning plays in the context of infrastructure transactions.

In planning for the transaction, it is important for the parties to consider future reporting of the tax implications of the transaction in meeting their tax compliance and financial reporting obligations. Furthermore, tax positions that may have been carefully contemplated in advance of the transaction need to be diligently monitored over the investment’s lifecycle. Thus, well-advised investors—and their advisors—must work together to ensure seamless integration between pre-investment tax planning, post-investment tax reporting, and ongoing tax planning and consulting.

Download our full report to gain a comprehensive understanding of the key tax considerations in U.S. infrastructure investments.

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The infrastructure asset class may be represented by the following sectors and sub-sectors:

Transportation:

Toll roads/lanes
Bridges/tunnels
Parking
Ports
Airports and aviation
Rail/transit
Shipping and logistics

Social infrastructure:

Correctional facilities
Educational institutions & student housing
Hospitals & public health facilities
Courthouses and civic buildings
Sports facilities
Housing
Municipal utilities (water/sewer/gas/electric)
Solid waste management

Energy and natural resources:

Power generation, transmission, storage, and distribution, including renewable energy sources
Oil and gas extraction, storage and transportation
Mining (coal, metals, etc.)
Timber, including carbon offset credit production
Water and wastewater

Telecom and digital:

Telecom infrastructure, including satellite communication
Data centers and fiber
Chip and other digital manufacturing

Market participants

The infrastructure asset class may involve the following market participants:

Investors:

Infrastructure funds
Sovereign wealth funds
Pension funds
Institutional investors
Corporate investors
High-net-worth/family offices

Government:

Public private partnerships (“PPP” or “P3”)
Seller/lessor of infrastructure assets Developers/operators:
Developers/construction companies/civil engineers
Contractors
Operators

Financiers/lenders:

Traditional banks & lending syndicates
Debt funds
Corporate investors
The public, through public bonds.

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A primer on infrastructure M&A and related US tax considerations

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