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purposes. Flow-through taxation means that the entity does not pay taxes on its income. Instead, the owners of the entity pay tax on their "distributive share" of the entity's taxable income, even if no funds are distributed by the partnership to the owners. Federal tax law permits the owners of the
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After assessment, then said profits or losses flow through the partnership to the partners who are then taxed on their share of said profits or losses generated by the partnership without any taxes levied against the partnership.
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entity to agree how the income of the entity will be allocated among them, but requires that this allocation reflect the economic reality of their business arrangement, as tested under complicated rules.
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has issued guidance as to how interests of UK tax residents in foreign partnerships should be treated for UK tax purposes.
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as not having a 'separate and distinct' legal personality from its members. As a result, partners are assessed to either
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Many common law jurisdictions apply a concept called "flow through taxation" to partnerships. Partnerships are a
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where the taxes are assessed at the entity level but are applied to the partners of the partnership.
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123:. First, these profits or losses of the partnership are assessed according to the
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23:. Many jurisdictions regulate partnerships and their taxation differently.
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Partnership taxation is codified as
Subchapter K of Chapter 1 of the
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Hong Kong Inland
Revenue Ordinance, Chapter 112, section 22.
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on their share of the profits and losses of the partnership
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In general, a partnership is treated under
Section 111
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is the taxation of the profits or losses generated by
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97:Following the case of Memec plc v CIR ,
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80:Income and Corporation Taxes Act 1988
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203:. You can help Knowledge (XXG) by
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111:Partnership taxation (Hong Kong)
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51:U.S. Internal Revenue Code
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