Introduction to partnership income tax and accounting treatment: Divide first and tax later is just a principle compared to corporate income tax.

That is, the partnership itself does not need to pay income tax. All income is calculated to each partner according to the partner's proportion, and the income tax of each partner is calculated.

And the "point" does not mean direct distribution of income, but a calculation process.

When it comes to partnership income tax, what cannot be avoided is the "Notice of the Ministry of Finance and the General Taxation Bureau on Partnership Income Tax Issues" (Caishui [2008] No. 159). This document is the cornerstone of partnership income tax, and of course it has also been criticized.

location.

First, let’s take a look at what is stipulated in Caishui [2008] No. 159.

1. In a partnership enterprise, each partner is the taxpayer.

If the partners of a partnership are natural persons, they shall pay personal income tax; if the partners are legal persons or other organizations, they shall pay corporate income tax.

2. Principles of taxation: The production and operation income and other income of a partnership enterprise adopt the principle of "divided first and taxed later".

The income from production and operations and other income referred to in the preceding paragraph includes the income distributed by the partnership to all partners and the income (profit) retained by the enterprise for the year.

Distribution first and tax later is just a principle compared to corporate income tax.

That is, the partnership itself does not need to pay income tax. All income is calculated to each partner according to the partner's proportion, and the income tax of each partner is calculated.

And the "point" does not mean direct distribution of income, but a calculation process.

That is to say, in terms of tax treatment, the profits of the partnership are calculated in the name of each partner in accordance with relevant regulations, and the tax income is calculated with the partners as the tax subjects.

3. Calculation of partner income The partners of a partnership determine their taxable income according to the following principles: (1) The partners of a partnership determine their taxable income based on the production and operation income and other income of the partnership according to the distribution ratio stipulated in the partnership agreement.

Forehead.

(2) If there is no stipulation in the partnership agreement or the stipulation is unclear, the taxable income shall be determined based on all production and operation income and other income according to the distribution ratio decided by the partners through negotiation.

(3) If negotiation fails, the taxable income shall be determined based on all production and operation income and other income in accordance with the proportion of the partners’ actual capital contributions.

(4) If the capital contribution ratio cannot be determined, the taxable income of each partner shall be calculated on average based on the number of partners based on all income from production and operation and other income.

The partnership agreement shall not stipulate that all profits shall be distributed to some partners.

This paragraph is basically consistent with the relevant provisions of the Partnership Enterprise Law and reflects the purpose of partnership.

4. The taxable income is calculated in accordance with the "Regulations on the Collection of Personal Income Tax on Investors in Sole Proprietorships and Partnerships" (Caishui [2000] No. 91) and the "Regulations on Adjustments to Individual Industrial and Commercial Households in Sole Proprietorships and Partnerships" by the Ministry of Finance and the State Administration of Taxation.

"Notice on Issues Related to Pre-tax Deduction Standards for Enterprise Individual Income Tax" (Caishui [2008] No. 65) calculation.

1) Caishui [2000] No. 91 stipulates personal income tax items and tax rates. The balance of the total income of sole proprietorships and partnerships (hereinafter referred to as enterprises) in each tax year after deducting costs, expenses and losses shall be regarded as the investor’s personal production and operation.

Income, according to the taxable items of "Income from production and operation of individual industrial and commercial households" in the Personal Income Tax Law, a five-level excess progressive tax rate of 5% to 35% is applied to calculate and levy personal income tax.

In the past few years, the 20% tax levy for LP individuals attracting investments in some areas is gradually disappearing.

Although some areas are still engaging in marginal measures, this is actually a lower-level law that violates higher-level laws. Although some places have given tax incentives, they are actually ineffective.

The total income referred to in the preceding paragraph refers to various incomes obtained by an enterprise from its production and operation and activities related to production and operation, including commodity (product) sales income, operating income, labor service income, project price income, and property leasing or transfer

income, interest income, other business income and non-operating income.

Calculation of personal income: Investors in sole proprietorships shall determine their taxable income based on all income from production and operation; investors in partnerships shall determine their taxable income based on all income from production and operation of the partnership and the distribution ratio stipulated in the partnership agreement.

If there is no agreed distribution ratio, the taxable income of each investor shall be calculated based on the average of all production and operation income and the number of partners.

The income from production and operation mentioned in the preceding paragraph includes the income distributed by the enterprise to individual investors and the income (profit) retained by the enterprise in the current year.