Corporate criminal compliance is an important criminal dispute resolution mechanism that is currently being promoted nationwide, with the aim of safeguarding economic operations, guiding well-run enterprises onto the path of legal compliance through compliance and rectification, and mitigating and bridging the adverse impact and consequences of corporate crime. The procedure can be widely applied in many fields, especially in coal such as the industry's own inherent reasons, coal enterprises are forced to fall into the tax-related criminal risk, through criminal compliance can save the enterprise, stabilize the development of the industry, with positive significance. This time, the Shanxi Provincial Procuratorate announced a batch of cases in which the criminal compliance procedure was applied to the "truthful opening" of coal enterprises, which is of typical significance. Accordingly, this paper discusses criminal compliance and defense strategies for readers' reference.

I. Shanxi announced a typical case of coal false invoice compliance, will start compliance for more than 20 enterprises

(I) The invoice problem in the coal industry persists, and the tax-related risk remains high

For a long time, in the field of coal, the problem of lack of input invoices for coal purchasing enterprises has been difficult to solve, which makes the phenomenon of tax evasion, substitute invoicing, and dependence frequent, and easily triggers the tax-related administrative and criminal risks of false VAT invoicing. Shanxi is a major coal province, and the coal industry has a significant impact on the economy, employment and people's livelihood in some places. Due to the relevance of invoices, once a series of false invoicing cases breaks out, it will cause a heavy blow to the places relying on the coal industry.

The problem of lack of input invoices in the coal industry is difficult to be solved properly in a short period of time. In order to promote the optimization and upgrading of the energy industry, the state has implemented a quota system for the mining of coal, and overruns cannot be sold normally. Some coal mines, in order to solve the backlog of inventory, lowered the price of illegal sales to the outside world, but the sales income is not accounted for, nor issued invoices.

For various reasons, such as lack of bargaining power or greed for low price, the trading enterprises and coal-using enterprises purchased coal without invoices, which could not offset the input tax of VAT, nor could it be listed on the income tax, and had a heavy tax burden, so they could only seek other ways to solve the problem of high tax. For example, looking for a third party to issue invoices on behalf of the third party, due to the fact that there are no real goods between the third party and the invoiced enterprise itself, and at the same time, there may be a return of funds, which is very easy to be recognized as false invoicing.

(II) More than 20 enterprises involved in false invoicing in a place in Shanxi, stabilizing the industry through criminal compliance

Recently, the Shanxi Provincial Procuratorate announced a number of typical cases of compliance by enterprises involved in the case, of which case 2 is "the case of false VAT invoices issued by three coal washing enterprises in Jiexiu City, Jinzhong". It was found that the lack of input invoices was a common scene in the area, and the coal processing enterprises were all of the "real goods on behalf of the opening" type, i.e., the enterprises involved in the case had really purchased coal or other raw materials, but due to the impossibility of obtaining invoices, they could only open the corresponding invoices from a third party on behalf of the invoices issued by the third party and the amount of the invoices issued by the third party and the amount of the transaction is in line with the. The enterprises involved in the case are up to more than 20 enterprises, which will be similar to this typical case, all applying enterprise compliance.

Obviously, the coal enterprises "truthfully open" has its own difficulties, extenuating circumstances. These enterprises are normal operation of the entity enterprise, the local employment, tax revenue, economic development has a positive role. As long as the corresponding tax is recovered, the compliance and rectification work ensures that the enterprises operate legally and in compliance with the law, and ensures that the enterprises no longer purchase low-priced coal without tickets and no longer issue invoices from a third party, a good social effect can be achieved.

(III) focus on the effectiveness of compliance, rectification of unqualified will still face public prosecution

The "Case of Three Coal Washing Enterprises in Jiexiu City, Jinzhong Province, Invoicing VAT Exclusive Purpose Invoices" above also has a key point worth noting, that is, the first three coal washing enterprises to carry out compliance, and only two of them passed the assessment of the third-party organization successfully. One enterprise failed to pass the assessment of the third-party organization due to the delay in payment of all taxes and the failure to meet the conditions for resumption of production after the expiration of the deadline for compliance and rectification, which was found to be a false rectification, and was prosecuted according to the law.

(IV) Summary and Questions

The initiation of criminal compliance shall be premised on the guilty plea and acceptance of punishment by the main responsible person. However, the "crime and non-crime" and "crime and crime" of tax-related criminal cases, especially false VAT invoice cases, are still controversial in practice. The most typical problem lies in the fact that, similar to the present case of "having goods to open on behalf of", whether it constitutes the crime of false invoicing of VAT special invoices or not, there is no doubt that it may still be on the border of guilt and innocence.

What is even more worrying is that the penalty for the crime of false VAT invoice is very heavy, and the amount of false tax reaches more than 2.5 million yuan, and the sentencing range is more than 10 years of imprisonment or life imprisonment. According to what I have learned in practice, nowadays, for cases that may be sentenced to more than 3 years of imprisonment, the procuratorial authorities are mostly cautious in activating criminal compliance; for cases that may be sentenced to more than 10 years of particular imprisonment, some places directly refuse to activate criminal compliance, or even if they activate corporate compliance, they have to pursue the criminal responsibility of the main responsible person.

In such cases, if professionals can intervene by reviewing the facts of the case, interpreting the principles of tax law, presenting facts and reasoning, and convincing the procuratorial authorities that the act does not constitute the crime of false issuance of VAT invoices, and that it should be acquitted of the crime or constitute other misdemeanor crimes of less than 10 years' imprisonment, the procuratorial authorities are more likely to be persuaded to activate the corporate compliance procedure.

II. the coal industry "truthfully opened on behalf of the goods", the choice of innocent defense or criminal compliance?

(I) From the principle of tax law, "truthful opening" does not constitute the crime of false invoicing.

In this paper, we believe that, judging from the constituent elements of the crime of false VAT invoicing, in this typical case, if more than 20 local enterprises purchased coal and other goods without invoices, and allowed the third party to issue VAT invoices equivalent to the actual purchased goods, it belongs to the type of false invoicing behavior, and should not constitute a crime. constitute a crime.

Article 205 of the Criminal Law stipulates that the crime of false issuance of VAT invoices is relatively simple, which is also the reason why there is inconsistency in the judicial application of this crime in practice. In the early years, the case-handling authorities mostly simply determined that the crime of false invoicing of VAT is a behavioral crime, i.e., as long as an invoice is issued that does not conform to the actual business situation, it constitutes false invoicing. This view has been denied by the judgment of the Supreme People's Court. In the typical case of "Zhang Mouqiang's Case of False VAT Invoice", the Supreme People's Court made it clear that "it does not have the purpose of tax evasion, and its behavior has not caused tax loss to the state and is not socially harmful", and does not constitute a crime. In the Opinions of the Supreme People's Procuratorate on Giving Full Play to Procuratorial Functions to Serve and Guarantee the Six Stabilizers and Six Guarantees, the Supreme People's Procuratorate also explicitly pointed out that "the boundaries between general tax-related offenses and tax-related offenses committed with the purpose of defrauding the state of tax revenues should be grasped". It is also clearly stated in the Opinion of "Six Stability" and "Six Protection" that "to grasp the boundaries between general tax-related illegal acts and tax-related crimes for the purpose of cheating the state tax", and that "the false opening behaviors that are not for the purpose of cheating the state tax and have not caused any loss of tax" are not dealt with as the false opening crimes.

The so-called truthful invoicing refers to the fact that the invoiced party buys goods without invoices and, in order to obtain invoices, allows a third party to issue VAT special invoices in accordance with the quantity and amount of the goods and truthfully declares and pays the VAT, and the invoiced party obtains the benefit of offsetting the tax. Since VAT is an out-of-the-money and turnover tax, as long as each payment and deduction link is not interrupted, it will eventually be fully transferred to the consumers, therefore, in this case, there is no subjective intention to cheat tax, and objectively it does not result in the loss of the national VAT payment, and its harm is less, so that it should not be recognized as a crime and should be referred to the tax authorities for administrative treatment.

(II) The judicial practice is of different caliber, and efforts should be made to defend the innocence first.

Although the truthful invoicing does not satisfy the constituent elements of the crime of false VAT invoices, there is a lack of clear legal provisions, mainly Article 205 of the Criminal Law on the crime of false VAT invoices, and there is no explicit requirement for its subjective intent to cheat tax and objective loss of VAT tax as the elements. Although the Supreme People's Court and the Supreme People's Procuratorate have emphasized this on many occasions, the relevant typical cases (not guiding cases), opinions and replies are not very effective. As far as practice is concerned, the caliber of handling similar cases varies from place to place. Some places recognize that truthful opening does not constitute a crime, but some places still believe that truthful opening is the crime of false opening of VAT invoices. In fact, from the typical case exposed in Shanxi, it can be seen that the behavior of more than 20 enterprises in a certain place of issuing invoices on behalf of others was characterized as the crime of false VAT invoicing.

In the case of "truthful invoicing", the enterprises involved and the main responsible persons are first faced with the choice of whether to carry out the defense of innocence. In particular, if criminal compliance can be applied, the final decision not to prosecute through pleading guilty and corporate compliance is still a good result for the enterprise and the person primarily responsible. However, if corporate compliance is chosen, it means that the person can no longer plead not guilty, and there are certain risks for the person during the compliance process, such as:

1.after pleading guilty and being characterized for the crime of false VAT invoicing, its final compliance program fails to be approved by the Provincial Prosecutor's Office due to the heavier penalties.

2.The enterprise is no longer able to carry out normal business activities due to the payment of taxes, late fees and penalties, which prevent it from passing the compliance assessment review.

Because this is still in the prosecution review stage, this paper believes that the defense should be in the interests of the parties to consider, first of all, communicate with the prosecution, exchange, facts and legal reasoning, the truthful opening does not constitute the crime of false invoices of the theory, the case, as well as the approval of the two high, the opinion, show to the prosecution, try to persuade the prosecutor to obtain a decision of non-prosecution directly. If you can not directly obtain the decision not to prosecute, by arguing that the truthful opening itself is recognized as a false invoicing crime does not meet the false invoicing constitutive elements, and penalties are too heavy and other issues, you can also persuade the prosecuting authorities as well as the Provincial Prosecutor's Office of the start of the criminal compliance.

(III) If the tax amount of "truthful invoicing" is huge, the defense of innocence or misdemeanor is still necessary.

Among the tax-related crimes, the penalty for the crime of false VAT invoicing is very heavy, and if the amount of false tax invoiced exceeds 2.5 million RMB, it can be sentenced to more than ten years of imprisonment. If the perpetrator pleads guilty to the crime of false VAT invoices and its false tax amount, he may be sentenced to more than ten years' imprisonment for constituting a felony. Some local procuratorial authorities generally adopt a more strict and cautious attitude towards crimes that may be sentenced to more than 10 years' imprisonment, making it difficult to initiate criminal compliance procedures.

Therefore, the defender may, by analyzing the circumstances of the case and jurisprudence, communicate with the procuratorial authorities on the basis that the act of truthfully issuing on behalf of the defendant is not sufficient to constitute the crime of falsely issuing VAT invoices, and retreat to seek for other misdemeanor crimes, such as the crime of falsely issuing invoices and the crime of unlawfully purchasing invoices, etc., so as to reduce the possible prison term to less than 10 years for the purpose of applying the compliance procedure.

(IV) Strengthening communication with the procuratorial authorities and camera selection for criminal compliance

This kind of false invoicing behavior, of course, constitutes an administrative violation in tax law, but this behavior is the next best thing for the enterprise out of necessity, with little social harm and no loss of national tax, if the crime of false VAT invoicing is convicted and sentenced, it will be a major blow to the well-managed coal enterprises, and may even be shut down and bankruptcy. Therefore, the application of enterprise compliance to this kind of behavior is in line with the spirit of "six stabilizations and six guarantees" of the central government. However, it should also be noted that due to the seriousness of the crime of false VAT invoicing and the long term of imprisonment, there are many risk points in the application of corporate compliance, which requires the intervention and cooperation of professionals in order to make corporate compliance smooth. In conclusion, in today's vigorous implementation of criminal compliance, the role of tax-related criminal defense lawyers has instead been further strengthened.

III. focus on the defense strategy of criminal compliance, with the procuratorial authorities to successfully carry out compliance

(I) Compliance in serious cases shall be reported to the provincial procuratorate for approval, and enterprises shall provide strong justifications.

According to the provisions of Article 10 of the "Guiding Opinions on the Establishment of Third-Party Supervision and Evaluation Mechanisms for Compliance of Enterprises Involved in Cases (for Trial Implementation)", the criminal compliance program of enterprises shall be initiated in accordance with the application of the parties involved in the case. The procuratorial organ handling the case shall take the initiative to inform the party concerned if it finds out in the course of handling the case that it can apply the criminal compliance procedure.

At the "National Procuratorial Authorities' Pilot Work Deployment Meeting on Comprehensively Pushing Forward Compliance Reform for Enterprises Involved in Cases" in April of this year, it was proposed that the criminal compliance procedure be pushed forward on a nationwide scale, but the meeting also emphasized that "for enterprise-related criminal cases in which the person in charge of the enterprise involved in the case may be sentenced to more than three years' fixed-term imprisonment, and for major difficult and complex cases, the provincial procuratorates shall earnestly implement the duties of unified gatekeeping and case-by-case review." As a result, all cases of more than three years' imprisonment are required to pass through the provincial procuratorates for examination and approval. In this case, the initiation and application of criminal compliance procedures, extremely test the enterprise involved in the case, to see whether the enterprise can come up with detailed and powerful reasons and evidence from both the factual and legal aspects, to persuade the case-handling procuratorate and provincial procuratorate to apply criminal compliance procedures.

(II) Factual level: the enterprise is operating well, with the value of compliance

Enterprise criminal compliance procedures, is corresponding to the central "six stable six guarantees" policy, for good business conditions, good prospects for the development of enterprises, through the compliance rectification to guide them on the road to legal compliance, reduce the damage caused by the enterprise crime, reduce the impact on the development of the local economy. Therefore, enterprises must be physically operated and in good operating condition to contribute to local economic development, tax revenue and employment. In particular, enterprises must not fall into stagnation after paying taxes, late fees and fines, and must still be able to restore normal business conditions and order.

(III) Legal Level: Starting from the defense of innocence and misdemeanor, persuade the case officers to initiate compliance.

For the case officers, the start of corporate compliance can certainly save the enterprise involved, but if the case is significant and complex, for example, may be sentenced to more than three years of illegal crime, the person involved in the case through the compliance to be non-prosecution, for the procuratorate is still a greater pressure; may be sentenced to more than ten years of crime, if rashly non-prosecution, for the fight against crime may bring about a negative effect, therefore, procuratorate general Therefore, the procuratorate generally refuses to comply with the non-prosecution. In this case, the enterprises involved in the case should actively communicate with the procuratorial authorities, starting from the defense of innocence and misdemeanor, and correcting the erroneous determination of the crime and the amount of money. Or propose mitigating circumstances, such as surrender, to reduce the sentence, more to ensure that the criminal compliance program.

(IV) Focus on the actual effect of compliance, and successfully pass the evaluation of the third-party organization

Criminal compliance procedures must focus on the effect of compliance rectification, to avoid the emergence of "false compliance, paper compliance" situation, if the rectification is not in place, failing to pass the assessment of the third-party organization, there is still a possibility that the procuratorate will be referred to the court for public prosecution, facing criminal sanctions. Therefore, the enterprise involved in the case if the compliance and rectification procedures, the main person in charge of the bail pending trial, should actively carry out the corresponding rectification work, internally to strengthen the system construction, rectify the irregularities of the system; externally, but also to actively resume normal production, operation work. In the typical cases announced by Shanxi, there are enterprises due to the expiration of the rectification period, failed to resume production and operation, and was found to be unqualified to be referred to prosecution. Therefore, enterprises should attach great importance to the effect of rectification, especially the resumption of normal production of this piece, to actively communicate with the public security, tax, timely access to the seizure, restoration of the tax control disk, bank accounts, such as difficulties, but also apply for a certain period of time to suspend payment of taxes, etc., to help enterprises to resume normal business as soon as possible.