In fact, in order to solve the double tax burden of corporate funds, many countries have adopted a flexible approach, requiring that as long as the company distributes its annual income to investors and investors pay taxes, it can use the company as an investment channel without paying taxes.

However, according to China's current progressive tax system, due to factors such as overall performance, some funds may be deducted from income without receiving money, but there are also restrictions on taxation. Even for limited partnership funds that do not need to pay enterprise income tax, in practice, many still have to pay standard progressive taxes as individual industrial and commercial households, and the tax rate is set at 5%~35%.

But in fact, these funds have often withdrawn from the project, but the funds have not recovered the cost. The payment of progressive tax has further dampened the fund investors' willingness to contribute, including the mergers and acquisitions of many listed companies. It often happens that the seller can't fulfill his tax obligations because he doesn't have enough cash in the consideration for the purchase payment, and the transaction finally falls through.

Therefore, the progressive tax system puts forward high requirements for the income accounting level of investment institutions. According to the work plan, eligible venture capital enterprises with corporate system shall be exempted from enterprise income tax according to the proportion of individual shareholders holding shares at the end of the year. In the eyes of the industry, this means that even if the enterprise funds can record the unrealized investment income in the account year by year without paying taxes, the premise is that it will not be distributed to individual shareholders.

For corporate private equity investment funds, the investment company is not only the holder of the fund share, but also the shareholder of the company, so as to enjoy the corresponding shareholder rights according to law, and at the same time bear limited liability for the debts that the company does not exceed its capital contribution. At the same time, for some fund share holders, they can still participate in investment decision-making through the investment Committee of the fund manager, and have a substantial impact on specific investment activities.

Therefore, compared with the structural advantages of the separation of LP and GP in limited partnership funds, it is difficult for corporate funds to achieve the absolute consistency of shareholders' behavior. If shareholders demand to cash in their share of personal income corresponding to book income, taxation is inevitable. Even for conservative reasons, enterprises that want to be exempted from income tax and not included in the investment income of the current year still challenge the company's brand building and active management ability.