when forming a joint venture the most common thing the two parties can do is to set up a new entity as the jv itself isn t recognized by the internal revenue service irs the business form between the two parties helps determine how taxes are paid 
as the jv is a separate entity it will pay taxes as any other business or corporation does however if it chooses to operate as an llc its profits and losses would pass through to the owners personal tax returns as with any other llc 1the jv agreement will spell out how profits or losses are taxed if the agreement is merely a contractual relationship between the two parties then it will determine how the tax is divided between them joint ventures vs partnerships and consortiumsa joint venture is not a partnership that term is reserved for a single business entity that is formed by two or more people jvs join two or more different entities into a new one which may or may not be a partnership the term consortium is sometimes used to describe a jv and there are similarities however a consortium is a more informal agreement than a jv for example a consortium of travel agencies can negotiate and give members special rates on hotels and airfares but it does not create a whole new entity the agencies still pursue their own businesses independently in a jv they would share ownership of the created entity jointly responsible for its risks profits losses and governance example of a joint venturein 2022 two large japanese companies sony and honda announced a joint venture to create an electric vehicle sony is one of the world s most prominent electronics companies and honda is one of the most prominent automobile companies 2the established joint venture seeks to bring an electric vehicle to market by 2026 by combining honda s skills in mobility development technology and sales with that of sony s expertise in imaging telecommunication networks and entertainment 23the joint venture is called afeela the company will be taking pre orders in 2025 with expected delivery in the u s in 2026 43