As a shareholding platform, limited partnerships have advantages but also have many tax pain points. The current tax law is still somewhat rough with regard to the assessment and collection, equity transfer, tax base confirmation and stock reduction of limited partnerships, which has led to many disputes over the partnership tax system in practice. Especially after the promulgation of Announcement 41, partnership shareholdings have attracted much attention from tax authorities. What are the tax-related risks when taxpayers choose to make external investments through limited partnerships? What tax issues should you focus on?
In order to clarify the above issues, M&T held an offline meeting on "Analysis of Common Tax Difficulties of Limited Partnership Shareholdings" on the afternoon of June 29, 2023. The meeting was lectured by lawyer Shi Zhiqun, a partner of M&T Lawyers, and the participants were the company’s financial director, the person in charge of the family office, and the person in charge of the relevant business of the securities company.
At this meeting, Lawyer Shi first analyzed the reasons why partnerships are so popular, that is, why choose partnerships to hold shares? Advantages and considerations of choosing a partnership to hold shares. Then he shared the trend and current situation of partnership shareholding being “strongly” regulated by tax authorities. Secondly, how to characterize the income from the transfer of equity in a limited partnership? How to calculate the cost after transfer of partnership shares? Can nested partnership funds choose single accounting? Can a partnership holding platform apply for tax deferral on equity incentives? When a company changes to a partnership, why is it required to pay back taxes? This article introduces the latest practical policies on the taxation policy for shareholdings of limited partnerships. Finally, the tax system advantages of limited partnerships in Hainan and other regions were shared, as well as tax audit response plans.
Part of the meeting content is as follows:
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