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. The State Administration of Taxation (SAT) is in the final stage 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 on taxes to be levied on the premiums of PE investments have led to widespread discussions and concerns in the industry. There are forecasts and discussions as to how PE funds will pay tax and how premiums on investments will be taxed. The promulgation of the Implementation Measures will help clarify various tax concerns of partnership funds and their investors.
The seminar focuses on explaining and discussing tax issues commonly encountered by PE investment funds and partnership enterprises. In addition, we recently communicated with SAT on behalf of the 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 of 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 Renminbi funds as limited partners or general partners will constitute a permanent establishment in China and the related risks |
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Whether enterprises' limited partners are also obligated to file taxes. |