The development of Internet technology has explored new development directions for traditional industries, but the hidden risks also come with it. Traditional tax consulting, planning and bookkeeping services have been able to transcend geographical restrictions and face a broader market in the context of the digital economy. On this basis, Internet tax platforms have emerged, which aim to reduce the tax burden of enterprises and individuals, but the corresponding means stray into the gray area of legal and illegal. With the cleanup of local tax policies in recent years, the activity space of Internet taxation platforms has been greatly compressed, and the corresponding tax-related risks are constantly high. By summarizing the reasons for the risk outbreak of Internet taxation platforms in recent years, this paper aims to point out the risks for the platforms in order to strengthen the work of self-examination and compliance.

I. The state special governance of local illegal tax concessions and fiscal intermediaries trigger risks

The risk outbreak of the Internet finance and tax platform has its own background and external causes, mainly referring to the special governance carried out by the state in recent years from two aspects. On the one hand, it has cleaned up and canceled the fiscal and tax concessions granted by local irregularities, and on the other hand, it has carried out special governance activities for fiscal and tax intermediaries. During the special governance activities, the platform's tax-related risks are prone to erupt.

(I) Cleaning up local tax policies leads to platform risks

The introduction of taxes, the content of the levy, the preferences, and the abolition of the tax, all belong to the scope of the law reserved. Local tax incentives granted in violation of the law and disguised tax incentives in the form of financial funds violate the principle of tax law. At the same time, such locally created "tax depressions" are also against the national tax policy. Therefore, the central government has repeatedly demanded that such policies be cleaned up and canceled.

On May 29, 2022, the Guiding Opinions of the General Office of the State Council on Further Promoting the Reform of the Fiscal System Below Provincial Levels (Guo Ban Fa [2022] No. 20) further demanded that, "unless otherwise stipulated by the state, the policy of full retention of fiscal revenues or incremental return of fiscal revenues to all types of regions shall be gradually abolished" and that "No irregularities shall be made in the assessment and ranking of tax and fee revenue indicators. Gradually clean up subsidy or rebate policies that unduly intervene in the market and are linked to tax and fee revenues."

Against the backdrop of cleaning up and political local policies, the Audit Office and audit agencies at all levels will find clues of tax-related violations by related enterprises in the course of monitoring government administration. For example, the Deputy Auditor General of the Audit Office made a "Report of the State Council on the Rectification and Improvement of Issues Identified in the Audit of the Execution of the Central Budget and Other Fiscal Income and Expenditure for the Fiscal Year of 2021" on Dec. 28, 2022, pointing out that at present, "there is the problem of lax administration of personal income tax." "The tax authorities have recovered 3.772 billion yuan in taxes as well as late payment fees, filed audits of 13 enterprises, and pursued two people." It can be seen that the risk of Internet tax platforms will continue to be high.

(II) Special rectification of tax-related intermediaries uncovered illegal clues

As tax-related intermediary service providers play a key role in assisting tax evasion and other issues, they have become a key target for the supervision of tax authorities.2022 On March 25, 2022, the State Internet Information Office (SIIO), the State Administration of Taxation (SAT), and the State Administration for Market Supervision and Administration (SAMSA) jointly issued the "Opinions on Further Regulating Profit-making Behavior of Online Live Streaming and Promoting the Healthy Development of the Industry" (Taxation General Income Issue [2022]). No. 25), which "seriously dealt with and publicly exposed intermediaries and related personnel who planned and helped implement tax evasion for webcast publishers in violation of the law in accordance with the law." On April 18, the three departments also jointly issued the Notice on Regulating the Behavior of Tax-Related Intermediary Services and Promoting the Healthy Development of the Tax-Related Intermediary Industry (Tax General Nasdaq [2022] No. 34).

Obviously, the Internet finance and tax platform provides tax-related intermediary services, and it is more likely to be regulated by tax authorities because it relies on Internet technology to provide services across the country, with a wide range of services and complex and hidden operations. At the same time, not only the tax authorities, but also the Internet information department and the municipal supervisory department will also refer to the tax investigation if they find clues of tax-related violations by the platform enterprises in the course of law enforcement.

(III) "Clear Action" to investigate and deal with false propaganda on financial and tax platforms

With the joint activities of the Internet Information Office, tax authorities and municipal supervisory departments in investigating and dealing with illegal and false propaganda of water-related intermediaries, some tax-related intermediaries have already been investigated and dealt with for false propaganda. If the water-related intermediaries are involved in illegal behaviors such as false billing and tax evasion, the related risks will also explode.

For example, the Tianjin Hexi District Tax Bureau investigated and penalized Star River (Tianjin) Enterprise Service Group Co. for publishing tax-related false propaganda information such as "tax return service". The Tax Bureau of Ganjingzi District, Dalian City, investigated and penalized Dalian Wuzhou Accounting Service Co., Ltd. for publishing tax-related false propaganda information, such as "Practical and reasonable tax avoidance methods" and "Secrets of reasonable tax saving", and so on.

II. The risk of illegal tax platforms "reducing tax burden" for individuals or enterprises is prone to erupt.

(I) Platforms collect cost and input tickets for corporate clients in violation of the law.

If enterprises want to seek legal ways to reduce tax burden, generally speaking, only the application of the corresponding tax incentives, and these policies are limited to small-scale taxpayers, science and technology and other state-encouraged industries, Hainan and other state-encouraged regions, etc., does not have universal applicability. A normal business enterprise, basically there is no possibility of significantly reducing the tax burden. In practice, some fiscal platforms have implemented the behavior of false invoicing, falsely issuing VAT special invoices or ordinary VAT invoices for client enterprises through controlled shell enterprises. Some platforms even find natural persons to issue invoices on behalf of their clients to cover costs. With such strict regulation of invoices by tax authorities, the platforms can hardly be blamed as the risk of falsely issued invoices is passed on.

(II) Platforms convert the nature of income for individual customers, split income, false declaration

The so-called conversion of the nature of income refers to the conversion of an individual's comprehensive income, such as wages and salaries and remuneration for labor services, to business income in order to apply a lower tax rate. What's more, they will register individual business to apply the approved policies of value-added tax and income tax, in order to achieve the purpose of significantly reducing the tax burden. Splitting of income means that when the income of an individual reaches the upper limit of enjoying the approved policies and tax exemption policies for individual business households, he or she registers multiple individual households and sole proprietorships in multiple places, and splits his or her income to enjoy the tax benefits separately. False declaration, on the other hand, refers to the fact that some platforms, after registering individual households for enterprises, falsely fill in VAT and income tax, and cancel the individual households after declaring and paying them.

As the state has strengthened the regulation of individual income tax, such behavior also faces great risks. On the one hand, if a self-employed person operates abnormally, for example, his income is stuck at the upper limit of the applicable tax incentives every time, or his monthly income is not continuous, etc., he may easily trigger an early warning and be found to be an empty shell during tax audits, which will lead to an outbreak of risk. On the other hand, self-employed persons are also required by law to establish account books and collect revenue by checking accounts. When a certain place restricts the policy of authorized collection and must collect revenue by checking accounts, these shell self-employed persons are unable to establish sound account books, and they are either unable to operate or shut down and write off their accounts, which is also prone to attracting the attention of the tax authorities.

In this type of behavior, the fiscal platform commits the act of helping others to evade taxes. At the administrative level, since the subject of tax evasion can only be the taxpayer or withholding agent, the fiscal platform will not constitute tax evasion, but rather "illegally providing bank accounts, invoices, certificates, or other convenience for the taxpayer or withholding agent, resulting in unpaid or underpaid taxes" as stipulated in Article 93 of the Implementation Rules of the Tax Collection and Administration Law. ", and may be fined up to one times the amount of unpaid or underpaid tax. At the criminal level, it constitutes an aiding and abetting offense of tax evasion.

(III) A large number of shell enterprises and individual households registering in clusters triggers early warning

The fiscal platform must control a large number of individual households and shell enterprises whether it wants to issue false invoices or split income. At present, because shell enterprises play an important role in the false invoicing offense, the tax authorities and municipal supervision departments are very strict on the supervision of shell enterprises. If a business does not exist for a long time, a sudden surge in business, a serious mismatch of inputs and outputs, and multiple businesses registered at one address ...... will inevitably attract the regulatory attention of the tax, which will investigate and deal with the corresponding risks.

III. Risks of false invoicing by customers utilizing the tax platform erupted

(I) Customers provide false information to instruct the platform to issue false invoices

In the business development of some fiscal and taxation platforms, they utilize the local government's investment promotion policy to register enterprises in the local area for their customers, so that the customers can transfer their business to the enterprises set up in the investment promotion. In order to be able to provide services on a continuous basis, the fiscal and taxation platform will control these enterprises and act as an agent for bookkeeping, tax declaration, collection and payment of funds and other behaviors. When the customer needs to carry out business, the customer will pass the business contract and information to the platform, and the platform will accept or issue invoices and receive and pay funds according to the customer's instructions. At this time, if the customer provides false business contracts and materials and instructs the platform to issue false invoices to the outside world, and the platform is unable to detect the problem through the formal examination, the platform will be easily recognized as the responsible subject of false invoicing because it is the actual controller of the enterprise's invoicing.

Of course, we believe that the Internet tax platform is to issue invoices externally according to the instructions and demands of the customers and the information provided by the customers, and to provide tax services only. As long as the Internet tax platform has fulfilled the obligation of formal examination and required the customer to make the guarantee that the business is real and legal, the customer should bear the responsibility of false invoicing. However, in practice, if the platform's business compliance is not done well, and it cannot effectively distinguish its own responsibility, there is still the possibility of being punished for false invoicing or helping false invoicing.

(II) Platform business personnel colluding with customers for false invoicing

Internet tax platforms conduct business nationwide, so they will set up branches in several regions, and local managers and other persons in charge will carry out activities such as business promotion and customer negotiation in the local area. In practice, we find that there are some regional responsible persons who conspire with customers to utilize the platform for false invoicing and then obtain the benefit fee for invoicing from customers, thus involving the platform in the risk of false invoicing.

IV. The way of compliance for internet tax intermediary platforms

(i) Strengthening platform compliance is imminent

The Internet empowers traditional tax-related intermediaries, but essentially the legal relationship established between Internet tax platforms and their clients has not changed, and the legal regulation and compliance requirements of the platforms have not changed. At present, the Internet finance and tax platform belongs to the industry field with high risk and much regulatory attention, and if it fails to do its own tax compliance, it will incur penalties and even criminal risks from the tax authorities.

The tax compliance of the Internet taxation platform is essentially a pre-arrangement before the business is carried out, and arrangements are made for two types of tax-related risks. The first type is the tax-related risks that can be controlled by the platform and can be identified and avoided, such as business personnel using system loopholes to conspire with customers to issue false invoices, and the platform itself utilizing controlled enterprises or individual households to issue false invoices intentionally, etc.; the second type is the tax-related risks that are beyond the control of the platform, such as false invoices issued by customers providing false information, and changes in the policies of the local government.

(II) Prevention of Controllable Risks of Internet Tax Platforms

To eliminate the controllable risks within the Internet taxation platform, the platform should eliminate the business of false invoicing or tax evasion. First of all, in the management of invoices, if the platform really masters the local investment policy, it can provide customers with services such as registration, agency bookkeeping, and tax declaration on behalf of customers, but the business should adhere to the bottom line of the real business, and it should audit the business information provided by customers, and if it finds clues of violation of the law, it should stop the business and report it to the tax authorities. Secondly, in the prevention of tax evasion, individual business accounts can be set up for customers in respect of their wishes to carry out foreign business, but individual accounts should not be utilized to split income, and account books should be opened when necessary. Thirdly, the management of business personnel should be strengthened, business personnel should be culturally trained to recognize and eliminate false opening, and the authority of business personnel, especially the person in charge, should be systematically controlled to avoid conspiracy of false opening between business personnel and customers. If business personnel have contempt for tax compliance or violate rules and regulations, they should be internally disciplined.

(III) Prevention of External Risks of Internet Tax Platforms

To prevent external uncontrollable risks, the platform must establish the awareness of responsibility isolation. The so-called segregation of responsibilities is to separate the risks of customers, employees, and the government from oneself through the construction of the system, and to persuade the tax and public security authorities to accurately clarify one's own responsibilities in the scenario of risk conduction.

First of all, in terms of compartmentalizing employee responsibilities, the platform should establish a good system and approval process. On the one hand, the system requires the elimination of false opening, tax evasion and other illegal phenomena. On the other hand, the authority and obligations of employees at all levels should be clearly constrained, and the function of approval should be clearly stipulated, and the materials for approval should be retained. If there is any conspiracy between the business personnel and the customers to issue false invoices, the business personnel should be held responsible if the behavior is within the scope of their own authority or if the approval materials provided by them are false.

Second, the risk of separating customers requires the platform to review the information provided by customers in the business of agent bookkeeping, agent tax declaration and agent payment, and to keep the working draft of the review. If the customer is fraudulent, the customer should be held accountable.

Third, for the government's violation of investment policies and agreements, the platform enterprise at the beginning of the establishment, should adhere to business compliance, to avoid corruption and other issues. When enjoying part of the policy, adhere to the legal and real business, and retain written instruments, notices, etc., to avoid the government's internal regulatory issues implicating the enterprise.