Study On Tax Avoidance And Anti-tax Avoidance Of Profit And Loss Sharing In Partnership

With the continuous improvement and development of the socialist market economy system,partnership,as one of the main market players in China,plays an increasingly important role in the process of economic development.Compared with other market entities,the partnership has unique advantages.Partners do not need to face the double taxation problem like the shareholders of the company,and they can contribute with labor.In the aspect of profit and loss distribution and sharing of the partnership,the partners can freely agree on the proportion of profit and loss distribution and sharing according to the actual situation,rather than enjoying dividends according to the proportion of subscribed capital contribution.This is the incomparable advantage of other market subjects and the embodiment of the autonomy of civil law and private law.But any freedom should have certain boundaries.Partner method for determining of the taxable income and distribution of profit loss sharing rules,if not the partnership profits loss allocation rules to make the necessary limit,for the purpose to avoid tax partner will abuse this freedom,making unreasonable distribution agreement,will cause many problems on the tax.The only limitation of the current partnership law on the allocation and sharing of profits and losses of the partnership by the partners is that the partners shall not agree to distribute all the profits and losses of the partnership to some of the partners.However,this restriction only applies to the general partnership.Where the partnership agreement provides otherwise,a limited partnership is not subject to this restriction and may distribute all profits to a limited number of partners.The author thinks that,the special provisions of the limited partnership while considering to investors hope to get high return on investment bear little risk of demand,is also to a certain extent,promote the development of the vc industry in China,but it also exists many problems in accordance with the regulations: first,this provision does not conform to the partnership enterprise "benefit-sharing,risk-sharing" principle;Second,it creates an unfair tax burden among partners.As a form of business organization,partnership is established for the purpose of obtaining maximum economic benefits.Under the current rules,partners may make unreasonable profit and loss allocation and sharing agreements to allocate specific types of income to specific partners,or distribute all transnational profits to non-resident partners,and deliberately mix up the profit distribution of labor remuneration and labor contribution to achieve the purpose of avoiding taxes.These behaviors violate the principle of tax law and the principle of tax fairness.Moreover,the management of the partnership is relatively loose,and the partners may change the proportion of profit and loss distribution of the partnership at any time according to the specific situation.Tax authorities cannot accurately and timely grasp the specific distribution of the partnership,which brings certain difficulties to the taxation work of the tax department.For the above reasons,the tax law does not recognize the fact that the profit distribution of a limited partnership is not subject to proportional limits,and explicitly requires that when the income payable to partners is determined,the profit of the partnership shall not be fully distributed to some partners.This regulation can be regarded as the adjustment of profit and loss sharing rules in the tax law.But,due to the particularity of China's national conditions,the ministry of finance and the state administration of taxation issued administrative file is the main source of the form of the tax law in our country,and the partnership profits loss distribution rule is to belong to the "partnership enterprise law enacted by the NPC standing committee has given the rights of the partners,when the rules affect the effect of tax,tax law whether has the right to adjust the rules directly,this rule is still be effective,how to define the limits of tax on the adjustment,the current law does not have a clear rules.Firstly,the author studies the evolution of the rules of sharing proportion of profit and loss distribution in partnership enterprises and the corresponding tax pattern,and then analyzes that the common value orientation of the two is to promote the establishment and development of partnership enterprises and the influence of the rules of sharing proportion of profit and loss distribution in partnership enterprises on partners' taxable income.Secondly,the author analyzes the tax avoidance problems caused by the current rules on the distribution and sharing of profit and loss in partnerships and the disadvantages caused by the particularity of the rules on the distribution and sharing of profit and loss in limited partnerships.Finally,analyze the principle of tax law to adjust the rule and the method of adjusting boundaries and it is concluded that the regulation of our country can draw lessons from the tax code,the introduction of the "economic substance" principle,to do not have any economic effect but only to avoid tax profit loss allocation for the purpose of sharing agreement to limit or denied in the tax effect directly.At the same time,our country can introduce the United States the rights and interests of the partnership base value system,and require more obligation for the partnership,the partners of the income loss in partnership,the level that detailed statistics,build equity capital account for each partner,tracking the partnership investment profit and loss.Moreover the partnership enterprise law in our country can draw lessons from enterprise income tax and individual income tax law to join the revised general anti-avoidance clauses,the law gives the verify the distribution of tax authorities to unreasonable economic adjustment,so it can avoid the conflict between the direct regulation of the tax law and host law on partnership,achieve a good connection.