Despite the rapid growth of the private equity (PE) fund industry in China in recent years, relevant tax laws and regulations, especially those concerning the tax treatment of limited partners of PE investment funds, remain unclear. In this regard, the State Administration of Taxation (SAT) is understood to be in the final stages of drafting the Implementation Measures for Income Tax on Partnership Enterprises and Partners (the "Implementation Measures"), which are likely to be released this year.
Recent media reports of taxes to be levied on the premiums arising on PE investments have led to widespread concerns in the industry and conjecture as to how PE funds will pay tax and how premiums on investments would be taxed. The promulgation of the Implementation Measures should help to clarify various tax concerns of funds organised as partnerships and their investors.
Our seminar focuses on canvassing and discussing tax issues commonly encountered by PE investment funds and partnership enterprises. In addition, we recently communicated with SAT on behalf of the China Venture Capital and Private Equity Association about the latest development of the Implementation Measures and we will share this information.
The seminar will focus on:
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Tax issues to consider when devising the structure of funds |
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Taxation principles and the taxation of the premiums arising on PE fund investments |
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Principles of levying income tax and applicable tax rates for funds and individual investors in partnership enterprises |
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Legislative concepts underlying the draft Implementation Measures |
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Possibility that the investment of a fund's foreign limited partners in RMB funds as limited partners or general partners will constitute a permanent establishment in China and the related tax risks |
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Whether RMB Fund's limited partners are also obligated to file taxes. |