Partnership enterprises shall pay taxes in the following ways:

1. The balance of the total income of the partnership after deducting costs, expenses and losses is used to calculate the partners' income from production and operation, and the five-level excess progressive tax rate of 5% to 35% is applicable.

2. The investors of a partnership enterprise shall determine the taxable income according to the partnership agreement. If the distribution ratio is not agreed, the taxable income of each investor shall be calculated on average.

3. The reasonable wages and salary expenses paid by the partnership to employees can be deducted before tax, but the wages of investors cannot be deducted before tax.

4. The advertising fee and business promotion fee of the partnership can be deducted within 15% of the sales income of the current year, and the excess can be carried forward to the next year for further deduction; Business entertainment expenses shall be deducted by 60% of the actual amount, but shall not exceed 5‰ of sales revenue.

Tax management of partnership enterprises;

1. Tax declaration: the partnership enterprise shall declare enterprise income tax, individual income tax and other related taxes according to the national tax law;

2. Taxpayer: As taxpayers, the partners of the partnership enterprise pay individual income tax according to their share of profits;

3. Tax rate application: corporate income tax is usually levied at the statutory tax rate, while personal income tax may adopt a progressive tax rate according to the income level of partners;

4. Tax registration: the partnership needs to register with the tax authorities and obtain a tax registration certificate;

5. Accounting: the partnership enterprise should establish and improve the accounting system and accurately calculate the taxable income;

6. Tax report: The partnership enterprise shall regularly submit financial statements and tax returns to the tax authorities for tax examination;

7. Tax preference: Partnership enterprises that meet the requirements can enjoy preferential tax policies stipulated by the state.

To sum up, when a partnership pays taxes, the partner income tax is calculated at the rate of 5% to 35% for the balance of its income after deducting costs and expenses, and the taxable income of investors is determined according to the partnership agreement or average distribution. A partnership enterprise may deduct reasonable employee salaries, but not including investors' salaries. Advertising fees and business promotion fees can be deducted within the specified proportion, and the excess can be carried forward to the next year. Entertainment expenses can be deducted according to 60% of the actual amount, with an upper limit.

Legal basis:

"People's Republic of China (PRC) tax collection and management law"

Article 25

Taxpayers must truthfully file tax returns in accordance with the time limit and content specified by laws and administrative regulations or determined by tax authorities in accordance with the provisions of laws and administrative regulations, and submit tax returns, financial and accounting statements and other tax payment materials required by tax authorities according to actual needs. Withholding agents must truthfully submit the tax withholding and collection report form and other relevant materials required by the tax authorities according to the actual needs in accordance with the time limit and contents of the declaration stipulated by laws and administrative regulations or determined by the tax authorities.

Article 4

Units and individuals who are obligated to pay taxes according to laws and administrative regulations are taxpayers.

Units and individuals that have the obligation to withhold and pay taxes according to laws and administrative regulations are withholding agents. Taxpayers and withholding agents must pay taxes, withhold and remit taxes and collect and remit taxes in accordance with the provisions of laws and administrative regulations.