Research On China’s Limited Partnership Private Equity Fund Tax Law

In resolving the financing of SME in China and adjustment of industrial structureprivate equity fund has a significant role. As economic levers to adjust theredistribution of the national economy and guide the flow of social capital, the taxlaws affect the decision-making of the private fund industry. How to balancereasonably the relationship between the tax revenue fairness and economic efficiencyunder the premise of safeguarding the interests of the state’s tax and promoting thedevelopment of the private equity fund, place a major problem in the face of our taxlaws legislators.After the modification of "Partnership Enterprise Law" on2006,the legalnorms of the limited partnership private equity funds form based on "PartnershipEnterprise Law", then departmental rules and local laws and regulations made furtheron taxable Rules. Is our current tax law system of the limited partnership privateequity funds prefect? Is the tax burden reasonable? How to define the nature ofCarried Interest? How to balance the relationship between tax fairness and economicefficiency? what can we learn from the bills of U.S. limited partnership private equityfunds?This is the intent of this study.The research of Limited partnership private equity funds is mainly economic point of view, rarely involved in the field of tax law. Only a book called ‘Establishand tax planning of private equity investment fund’, but it works only briefly touchedupon issues related to tax planning. Occasionally some practitioners have publishedsome articles, but the main is to introduce the present situation and problems of theprivate equity fund income tax in favor of practice, lack of theoretical research,especially the lack of systematic analysis and evaluation of private equity fund limitedpartnership tax law system.This paper attempts to compare the difference in tax burden of limitedpartnership private equity fund with the company private equity funds,,combinedwith the cases of CDH growth, leads to the successful use of the limited partnership inthe field of private equity funds. And through the systematic analysis of limitedpartnership private equity fund tax law system, learn from the U.S. limited partnershipsystem the latest bill of the private equity funds, in order to constantly improve ourlimited partnership system private equity fund tax law system, make it be able to givefull play to the tax law on promote the effect of the limited partnership private equityfunds, balanced tax equity and economic efficiency, to prevent the limited partnershipprivate equity funds become rich people misappropriating speculative instruments.The innovation of this paper: First, the topic is new, which is a detailed analysison the tax system of limited partnership private equity fund. Second, compared withthe tax burden of the corporate private equity funds and demonstrated through case,this paper has a strong practice. Third, through studying the latest bill in the UnitedStates and learning the American experience, this paper provide a reference for ourlegislation. But I do not have practical experience about tax authorities, financialinstitutions. Because of a subjective assumption,the legislative proposals are notcomplete.so I need further feasibility analysis.