📖 Approx. 5 minutes ／ Updated 2026.07.12
In this article, an M&A advisor specializing in the healthcare industry explains from a practical perspective how tax schemes become key issues in the business succession and medical M&A of surgical practices. We will outline specific measures based on the optimization of surgical equipment, transfer of surgical techniques, securing of specialists, capital gains tax, inheritance tax, and gift tax.
1. Industry Background of Tax Schemes in Surgical Practices
According to the Dynamic Survey of Medical Institutions by the Ministry of Health, Labour and Welfare, the business environment for medical institutions, including surgical practices, has become increasingly challenging in recent years due to a combination of factors such as medical fee revisions, rising labor costs, and the burden of capital investment. In particular, interest in third-party succession M&A is growing from the perspectives of surgical equipment, the transfer of surgical techniques, and securing medical specialists.
At the same time, tax schemes are a crucial point of discussion in medical M&A practice. By appropriately designing the optimization of capital gains tax, inheritance tax, and gift tax, a succession that benefits both the transferor and the transferee can be achieved.
2. Key Practical Points
- Preparation: Organize the workflow, patient base, and equipment status unique to surgical practices, and clarify the terms of the transfer.
- Valuation: Calculate an appropriate transfer price range based on the characteristics of the clinical department. In surgery, surgical equipment, the transfer of surgical techniques, and securing specialists are key to the valuation.
- Tax Scheme Design: Select the optimal scheme based on the optimization of capital gains tax, inheritance tax, and gift tax. Verification from tax, legal, and labor perspectives is also required.
- Buyer Search & Matching: Select potential buyers matching the characteristics of the clinical department from a nationwide network. Carefully align the desired terms of both parties.
- Due Diligence: Conduct thorough investigations from financial, legal, labor, and medical practice perspectives. Verify permits, licenses, and facility standards unique to surgical practices.
- Final Agreement & Closing: Execute the final agreement, including representations, warranties, and indemnification clauses. Proceed with the transfer of permits/licenses and staff announcements in parallel.
3. Specific Considerations for Surgical Practices
In medical M&A for surgical practices, surgical equipment, the transfer of surgical techniques, and securing medical specialists hold the key to a successful succession. There are numerous individual issues depending on the characteristics of the clinical department, such as the continuity of the patient base, employment retention of staff (physicians, nurses, and allied health professionals), the condition and replacement plans of equipment, and the maintenance or acquisition of facility standards.
Furthermore, strategic design based on market characteristics unique to surgery—such as the mix of insurance-covered and self-pay treatments, the status of regional medical cooperation, and relationships with neighboring competing medical institutions—is essential. Utilizing our track record in supporting surgical practice successions, we assist with practical operations from an industry-specialized perspective.
4. Practical Details of Tax Schemes
Tax schemes are an area that requires specialized consideration in medical M&A. Designing them with the optimization of capital gains tax, inheritance tax, and gift tax in mind is the key to success.
- Review of Relevant Laws and Practical Standards: Preparation in compliance with the Medical Care Act, tax laws, and labor regulations
- Collaboration with Experts: Working together with certified public accountants, tax accountants, attorneys, and labor attorneys
- Risk Assessment: Identifying potential risks and formulating response policies
- Consensus Building Between Parties: Designing mutually satisfactory terms for both the transferor and the transferee
- Proper Documentation: Clearly stating terms in the letter of intent (LOI) and final agreement
Frequently Asked Questions
Q. What documents are required for a consultation?
A. It will facilitate a smoother process if you can prepare the financial statements for the last three fiscal years, patient volume trends, staff composition, equipment list, and lease agreement (if applicable) in advance. We will collect these after signing a Non-Disclosure Agreement (NDA).
Q. What is the average transfer price range for a surgical practice?
A. For surgical practices, the valuation is based on surgical equipment, the transfer of surgical techniques, and securing specialists. As a general guide, clinics without beds are valued at 0.5 to 1.5 times annual revenue, while clinics with beds or hospital-scale facilities are valued at 3 to 7 times EBITDA. Details can be provided through our free preliminary valuation.
Q. What should we keep in mind when proceeding with a tax scheme?
A. Prior design based on the optimization of capital gains tax, inheritance tax, and gift tax is essential. Flawless execution through collaboration with experts is the key to success.
Q. Will our staff or patients find out about the consultation?
A. Information is disclosed on a limited basis only after signing an NDA, and no disclosure to stakeholders is made prior to the final agreement. We strictly guarantee confidentiality.
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