On February 22, the Report on the Research of Taxable Income Distribution Method of Partnership Private Equity Funds compiled jointly by Beijing Fund Town Institute and PwC was officially released.

Li Xiaohui, a professor at the School of Accountancy, Central University of Finance and Economics and director of the Beijing Fund Town Institute, attended and addressed at the meeting. Kang Jie, the financial sector leader partner of the Taxation Department of PwC and a member of the Expert Committee of the Beijing Fund Town Institute, issued a report with an interpretation. Liu Jia, senior manager of PwC China Tax Disagreement and Dispute Coordination Service, gave an in-depth interpretation of the recent tax dynamics and hot issues in the financial sector.

In recent years, private equity fund industry has developed vigorously in China, and private equity investment funds play an important role in promoting long-term fund raise and supporting innovation and entrepreneurship. Private equity fund by limited partnership has become the mainstream model among private equity funds because of its high flexibility in establishment, foreign investment, and income distribution. Moreover, from a tax point of view, it is a tax penetration entity that can avoid the double taxation. With the tightening of tax collection and management, various disputes and uncertainties in the taxation of partnership private equity funds have emerged one after another. In order to fill the research gap in this field of private equity funds and provide reference solutions for private equity fund managers, reduce management complication, and improve management fairness, Beijing Fund Town Institute and PwC jointly compiled the Report on the Research of Taxable Income Distribution Method of Partnership Private Equity Funds (the "Report").

To meet the needs of the financial work of fund institutions, specific implementation methods and complete logic for the "distributable cash flow reduction taxable income methods" are provided and the distribution of funds in different situations is also simulated in the Report. The logic and methods can be subsequently used for the distribution of real funds or the simulation test of the taxable income for managers, which will help all partners to reach an agreement and handle the distribution of taxable income more efficiently.