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Tax issues involved in private equity funds
I. value-added tax

Taxpayers of value-added tax can be divided into two categories, one is general taxpayers and the other is small-scale taxpayers. The criteria for distinguishing the two are: industrial enterprises with sales exceeding 500,000; Commercial enterprises, sales should exceed 800 thousand. The current standard for the added value of pilot enterprises is 5 million.

The above standard says that if the company's sales reach the above standard, it must be a general taxpayer. If you meet this standard and fail to apply to the general taxpayer in time, there will be penalties in taxation.

If the fund company's sales volume does not meet the above standards, it may also apply independently to the competent tax authorities for general taxpayers. Generally speaking, as long as the accounting is sound and there is a fixed place for production and business operation, the general taxpayer qualification can be given.

1, general taxpayer

The taxable amount of VAT is equal to the output tax minus the input tax.

The output tax is calculated according to the sales volume. According to a certain tax rate, generally speaking, private funds have some tax-related services or buy and sell financial goods, and the output tax is determined according to the 6% VAT rate. Then, subtract the input tax. Input tax is the tax determined on the special VAT invoice obtained by the company in some daily business activities. The tax rate may be 6%, 3% or 17%.

2. Small-scale VAT taxpayers

The tax payable is equal to the sales excluding VAT multiplied by the collection rate, so there is no problem of input tax deduction. This calculation method is similar to the original business tax method.

3. Value-added tax of companies and partnerships.

For value-added tax, legal person and partnership entity are both units that should pay value-added tax from the taxpayer of value-added tax. There is no difference between them in value-added tax, and they can be introduced from the output end and the procurement end respectively.

(1) output item

The main business of private equity investment funds may be buying and selling stocks and bonds, or buying and selling financial products. The payment of tax conforms to the provisions of document 19991120 1636, which belongs to the tax item of financial commodity transfer service under financial services.

According to the document, the transfer of financial commodities refers to the business activities of transferring the ownership of some financial commodities such as foreign exchange, securities and non-commodity futures. The transfer of other financial commodities includes the transfer of various asset management products such as funds, trusts and wealth management products and various financial derivatives.

For private equity investment funds, the tax method of financial commodity transactions is to take the balance of the selling price MINUS the buying price as the sales amount. If there are positive and negative differences in the transfer of financial commodities, the balance after breakeven is regarded as sales volume. If there is a positive difference after the offset, we will pay the value-added tax according to the regulations, divide the positive difference by 1.06, and then multiply it by 6%, according to this calculation method. If it is negative, it will be transferred to the next tax period to offset the sales of financial commodities in the next tax period. However, the negative balance at the end of the year cannot be carried forward to the next fiscal year.

The purchase price of financial commodities can be calculated by weighted average method or moving weighted average method, but it cannot be changed within 36 months after selection, and special invoices for value-added tax shall not be issued for the transfer of financial commodities. The above is the calculation method of value-added tax for private equity investment funds to buy and sell stocks and bonds. This method is actually similar to the original tax calculation method of business tax, but some adjustments have been made according to the principle of value-added tax.

(2) the output of equity investment funds

After the reform of the camp, there is actually no explicit provision on whether to levy value-added tax on the equity transfer of some enterprises. At the time of business tax, the document Caishui 2002 19 1 clearly stipulates that no business tax is levied on equity transfer.

According to the continuity of the camp reform policy and the instructions of the state leaders, value-added tax will not be levied on equity transfer in the future.

The above-mentioned equity transfer is only for pure equity transfer, and it has not passed the trading platform such as the New Third Board. At present, whether to pay value-added tax after the transfer of equity funds when the New Third Board exits is not clearly stipulated in State Taxation Administration of The People's Republic of China, and the policies in different places are also different.

If the equity is transferred through the New Third Board, it has the property of financial goods, and the value-added tax can be levied according to the value-added tax items of financial goods transfer.

(3) Input

There is little difference between private equity investment and private equity investment. The purchase of fixed assets, purchased office buildings, office supplies, office buildings, public utilities, and legal, accounting or tax and consulting services are all within the scope of investment. You can obtain a special VAT invoice to offset the input tax.

4. Value-added tax of contractual funds

Contractual funds adopt the principle of taxpayer taxation in tax law. Since contractual funds are composed of multiple parties through fund contracts, they are not recognized as taxpayers, so according to the current policy, value-added tax is not paid. But it does not include managers and investors.

Two. income tax

1, corporate fund income tax

Paying enterprise income tax according to the enterprise income tax law is the same as paying taxes in general companies, so I won't go into details.

2. Partnership fund income tax

According to the provisions of the fiscal number. On 2008 159, each partner of the partnership is a taxpayer. If the partners of a partnership are natural persons, individual income tax shall be paid; if the partners are legal persons or other organizations, enterprise income tax shall be paid. The income from the production and operation of a partnership and other income shall be divided first and then taxed.

The income from production and operation and other income mentioned in the preceding paragraph include the income distributed by the partnership to all partners and the income retained by the enterprise in the current year. If a part is allocated, the undistributed part retained in that year should also be declared with relevant income tax.

Please refer to Caishui 20009 1 and Caishui 200865 for specific calculation methods.

Third, the tax treatment of fund managers

Fund managers can be companies, partnerships or individuals. The manager's main business income may include investment dividends and management fees. According to the general practice, the management fee is charged at 2% of the raised amount, and some of it is excess income, which is generally extracted at 20% of the excess. In addition, there may be some consulting income.

1, income tax

If the manager is a company, the enterprise income tax shall be paid according to the above method.

If it is a partnership enterprise, the income shall be settled every year according to the principle of "distribution first, then tax", and similar profits shall be actually distributed, or if there is no actual distribution, the partners shall pay taxes directly.

Note: How do individuals pay taxes when they get dividends as managers?

The regulations are not uniform throughout the country, but there is no clear regulation in People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China. Basically, there are two ways to pay taxes.

One is to pay income tax, dividends or investment income according to 20%.

The second is to pay personal income tax according to the income from production and operation, that is, according to the tax rate of 5% to 35% for individual industrial and commercial households.

2. VAT

As a fund manager, the main income is the management fee of 2% of the total amount raised. For companies and partnerships, value-added tax is required, which is 6% for general taxpayers and 3% for small-scale taxpayers. Individuals, as administrators, pay VAT at the rate of 3% of small-scale taxpayers.

Consulting income is subject to 6% or 3% VAT on a small scale.

Another important income: income share, which is extracted according to 20% of the value-added part.

How to deal with this VAT? It is also controversial. Mainly lies in the nature of this income, whether it belongs to investment income or service income obtained from providing labor services.

Different understanding of this nature will lead to different taxes and fees. If it is investment income, you don't need to pay value-added tax, just pay income tax. If it is income from similar services and services, in addition to paying income tax, it also needs to pay value-added tax.

It is suggested that the company can write the form of income as the concept of investment income, rather than the service from accounting treatment to contract signing.

Four, some tax treatment of fund investors

Fund investors include some institutions and individuals. The income involved includes transfer income and income during the holding period, and the taxes involved include income tax and value-added tax.

For Public Offering of Fund, according to Caishui No.2008 1 and VAT Reform No.20 1636, it can basically be determined that part of its income from related investments is exempt from VAT and income tax. However, the general tax bureau may consider from its own prudent point of view that private equity funds do not enjoy preferential tax policies.

1, investment company fund

Personal income tax shall be paid according to the income from dividends. Of course, this refers to dividends. If the company's equity is transferred, individual income tax will be paid according to the equity transfer, which will be withheld and remitted by the payer. If there is no withholding agent, the tax rate is also 20%.

2, funded by the partnership fund.

If it is a legal person partner, the enterprise income tax shall be paid at 25% of the income.

If it is an individual partner, the dividends obtained should also be paid according to the above method.

3. Investment contract funds

No obligation to pay income tax.

If it is an individual investor, there is no withholding agent for the investment income obtained by the private equity fund, and the individual income tax is declared and paid by me according to the regulations. Many contracts for wealth management products stipulate that individual income tax is declared by individuals, and the fund is not responsible for withholding, which is also a common practice.

Verb (abbreviation for verb) tax incentive

For private placement, it is mainly the tax provisions of equity venture capital funds.

According to the provisions of Caishui No.201516 and People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.815, if a venture capital enterprise belonging to a limited partnership invests in unlisted small and medium-sized high-tech enterprises by means of equity investment, its legal person partner can deduct the taxable income of its partners for two years according to 70% of the investment of unlisted small and medium-sized high-tech enterprises.