The coal industry is an industry with a high incidence of tax-related risks. Compared with other industries, the tax-related risks of coal enterprises have certain special characteristics, which are manifested in the fact that coal enterprises have both the problem of insufficient inputs and the problem of surplus inputs. This is because the coal trade industry chain is long, for the source end of the small coal kilns to buy coal trading enterprises, due to the small coal kilns over-mining and other issues can not issue invoices, the coal trading enterprises will be insufficient inputs. As for the trading enterprises selling coal to scattered consumers at the terminal, because consumers do not need invoices, the coal trading enterprises will have the problem of surplus tickets. How to deal with the two kinds of tax-related risks when they occur at the same time deserves further study.

I. Coal Enterprises Issuing Surplus Tickets to Enterprises with Insufficient Inputs for Matching Tickets to Unvoted Raw Coal

Recently, Huatax received a case inquiry: there are two coal trading enterprises in a certain place, namely Company A and Company B. Company A mainly purchases commercial coal from coal chemical enterprises and sells it directly to local residents or small factories that use coal. Because these consumers do not require invoices, Company A has a large surplus of inputs, while Company A sells commodity coal without invoices and does not declare unbilled income according to the law.Company B mainly purchases raw coal from small coal kilns and sells it to coal chemical enterprises. Due to the over-exploitation of small coal kilns and the inability to issue invoices in accordance with the law, Company B had the problem of insufficient input for a long period of time. when Company B sells to downstream coal chemical enterprises, the downstream enterprises require to obtain invoices, but Company B will bear an excessive VAT obligation if it issues invoices for the full amount of the insufficient inputs. company B, through the introduction of an intermediary, contacted Company A. Company B obtains the input invoices from Company A by paying Company A a certain invoicing fee. Company B obtains input invoices from Company A by paying a certain invoicing fee to Company A. In the invoicing process, Company B provided Company A with the documents such as pound bills and settlement bills made by Company B for purchasing raw coal, and Company A issued invoices according to the quantity and amount recorded in the documents.

The local tax authorities analyzed the big data and found that the two companies had tax-related risks, and decided to file an audit. During the audit, disputes arose between the tax authorities and enterprises:

1. the tax authorities believe that: Company A sells goods to consumers, Company B purchases goods from small coal kilns, there is no goods purchase and sale relationship between Company A and Company B. However, Company A issues invoices to Company B, which belongs to the category of "not purchasing and selling goods, but issuing VAT invoices for others and letting others to issue VAT invoices for themselves", which constitutes the false invoicing of VAT invoices and should be investigated for the legal responsibility. The legal responsibility of false invoicing shall be investigated and transferred to judicial organs.

2. The enterprise thinks that although there is no goods purchase and sale relationship between Company A and Company B, the act of issuing invoice itself has not caused the loss of national tax, so it should not be investigated for the responsibility of false invoicing.

In this case, the views of the tax authorities seem to have a clear legal basis, but still stand in the invoice compliance point of view to examine the issue, without digging deeper into the essence of the case touched on the behavior, i.e., the behavior itself whether to cause legal infringement and infringement of what kind of legal interests. As a matter of fact, the case can be broken down into three kinds of behaviors: non-declaration of unbilled income, issuance of invoices without real transactions, and truthful issuance of invoices, and each kind of behavior should be analyzed separately in terms of its legal responsibility.

II. what kind of legal responsibility should be borne by the behavior of coal enterprises' surplus ticket allocation

(I) Non-declaration of unbilled income constitutes tax evasion by hiding income

In this case, the first tax violation involved in Company A is the non-declaration of unbilled income. According to Article 1 of the Provisional Regulations on Value-added Tax (VAT), "Units and individuals selling goods within the territory of the People's Republic of China shall be taxpayers of VAT and shall pay VAT in accordance with these Regulations". It can be seen that the VAT tax obligation is associated with the sales behavior, but not with the invoicing behavior. For the realization of the sale of goods, no matter whether invoices are issued or not, the taxable income should be declared and the output tax amount should be calculated and declared in accordance with the law. Where invoices have been issued, the invoiced income shall be declared, and where invoices have not been issued, the unbilled income shall be declared.Company A sold commodity coal to local residents and small factories but did not declare the unbilled income and calculate and declare the output tax amount in accordance with the law, resulting in under-under-assumption of the VAT tax obligation.

However, the underpayment of VAT is not necessarily related to false invoicing. The legal interest protected by false VAT invoices is mainly VAT, but the behavior it regulates is false invoicing, i.e., using the behavior of false invoicing to fraudulently offset VAT, thus realizing underpayment of tax. For non-invoicing behavior, it cannot constitute false invoicing. As a matter of fact, any kind of tax needs to realize tax payment through tax declaration, and VAT is no exception. In other words, VAT may be underpaid either through false opening and fraudulent deduction behavior or through false declaration behavior, and the latter should not be treated as false opening. According to Paragraph 1 of Article 63 of the Tax Collection and Management Law, "A taxpayer ...... who does not list or under-list income ...... in his books of account ...... does not pay or underpay the tax due is tax evasion. Tax evasion of taxpayers, by the tax authorities to recover their non-payment or underpayment of taxes, late fees, and impose non-payment or underpayment of taxes more than fifty percent or less than five times the following fine; constitutes a crime, according to the law, be investigated for criminal responsibility". It can be seen that non-declaration of unbilled income is essentially an undercounting of income in the books of account, i.e., the act of concealing income, which should be punished as tax evasion. If it constitutes a crime, it should also be punished as tax evasion, and the pre-administrative processing procedure should be applied.

In addition to Company A, there is another segment in this case that has underpaid tax due to concealment of income, i.e., the small coal kiln that sells raw coal to Company B. The small coal kiln that sells raw coal to Company B is subject to the restriction on the sale of raw coal. It was unable to provide VAT invoices for the excess coal mined due to the restrictive coal mining policy. As mentioned before, the invoicing behavior has nothing to do with the tax obligation, but in reality, the thinking of "controlling tax by invoice" is deeply rooted, and many enterprises believe that the tax authorities rely entirely on invoices to collect tax, and invoices should be declared for tax payment, and it is difficult for the tax authorities to find out that it is possible to evade the tax obligation if invoices are not issued. Therefore, for the unbilled income, the company chooses not to record, not to declare and not to pay tax. For the small coal kiln, such as its declaration of unbilled income will also lead to overmining behavior is investigated and dealt with, more loss than gain, so in the small coal kiln link there is also tax evasion.

(II) It is not appropriate to directly characterize the invoicing without real transaction as false invoicing for others.

The second tax-related offense in this case is that Company A issued VAT invoices for Company B without selling goods to Company B. The second tax-related offense in this case is that Company A issued VAT invoices for Company B without selling goods to Company B. According to the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Decision of the Standing Committee of the National People's Congress on Punishing Crimes of Falsely Issuing, Counterfeiting and Illegally Selling Special VAT Invoices (Fafa [1996] No. 30), Article 1, Paragraph 2, "Anyone who has one of the following behaviors belongs to the category of 'falsely issuing special VAT invoices ': (1) There is no purchase or sale of goods ...... but issuing VAT invoices for others, for oneself, letting others issue VAT invoices for oneself or introducing others ......". It can be seen that, if there is no goods purchase and sale relationship between the two subjects, but the issuance of VAT invoices belongs to the behavior of "false invoicing without goods" stipulated in No. 30 of the Law [1996], which constitutes false invoicing.

However, Law No. 30 [1996] was issued in the 1990s, when the VAT invoice system had just been established, false invoicing had just been criminalized, and a large number of false invoicing and fraudulent tax credits existed in the society. Fa Fa Fa [1996] No. 30 was issued out of the consideration of curbing chaos, and it was difficult to make accurate differentiation of the illegal invoices because the national tax collection and management technology was not perfect at the time of the enactment of the law, and it was not thorough enough in the consideration of the crime of false invoicing, so it adopted the attitude of preferring wrongdoing over indulgence, and it was provided with the provision of "one-size-fits-all". In fact, many of them are not applicable to today's society, and its overly harsh provisions are gradually considered not in line with the criminal composition of the false opening, not in line with the basic principle of "crime and punishment fit", it is necessary to be adjusted in the application of the law. For example, Article 6 of 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 stipulates that, "for enterprises with actual production and operation activities to increase their performance, raise funds, or take out loans for For enterprises with actual production and operation activities to increase performance, financing, loans and other non-tax fraudulent purposes without causing tax losses, the act of issuing VAT invoices falsely shall not be characterized as the crime of issuing VAT invoices falsely, and if a decision on non-prosecution is made in accordance with the law, the act shall be transferred to the tax authorities to be subject to administrative penalties." The opinion of the Six Stabilizers and Six Guarantees makes it clear from the legislation that invoicing without goods cannot be directly characterized as false invoicing, and that the subjective and objective aspects should be considered, especially whether the act itself has caused the loss of national tax in the end. It can also be said that it recognizes that invoicing without goods does not necessarily cause national tax loss.

In the author's opinion, for invoicing without goods, the inherent wrong view that invoicing without goods is equivalent to tax loss must be broken first. Returning to the principle of value-added tax levy, the sale of goods should be declared as taxable, and there is no obligation to pay value-added tax for unsold goods. For the invoice issued without selling goods, the same does not bear the tax obligation due to the invoicing behavior. In this case, Company A did not sell the goods to Company B. Even if it issued the invoice, it did not have VAT obligation. No matter whether Company A declares income to pay tax on the invoicing behavior, it will not cause loss of state tax. As for the offsetting behavior of Company B, whether it causes tax loss, it should be recognized in different situations: if Company A declares tax in accordance with law, Company A pays tax without tax obligation, which constitutes undue benefit to the state, and at this time, the tax offset by Company B will not be more than the tax paid by Company A, and Company B only offsets Company A's tax without obligation, which does not cause loss of state tax; if Company A does not declare tax in accordance with law, or because of the invoicing behavior, it does not cause loss of state tax; if Company A does not declare tax, or because of the invoicing behavior, it does not have tax obligation. Company A has not declared tax in accordance with the law, or because of the input surplus, resulting in the actual non-payment of any tax, Company B to offset, also does not necessarily result in the loss of state tax, but also need to consider whether Company B from the third party real procurement of goods, whether to obtain the right to offset. This will be analyzed in detail in the next section.

In addition, even if Company A does not have real sales and Company B does not have real purchasing, and its deduction has caused national tax loss, Company A should not be directly recognized as constituting false opening. Value-added tax has the characteristic of interlocking in tax collection and management, but it cannot be understood as a pair of criminals in criminal prosecution, and it is necessary to comprehensively consider the subjective aspects of all parties and reasonably determine the responsibility. In practice, there are cases of invoicing in good faith and receiving invoices in bad faith, or invoicing in bad faith and receiving invoices in good faith. For the bona fide invoiced, the tax law provides for bona fide acquisition of false invoices, for bona fide invoicing, although there is no express provision, but in practice is not uncommon. If company A is deceived to company B invoice, its subjective does not have the intention of false opening, but may have truthfully open on behalf of the intention, and company A to company B purchase situation to pay reasonable attention and prudent investigation obligation, it is not appropriate to pursue company A false opening responsibility.

To sum up, the invoice cannot be issued directly because of no real transaction, and deduced that Company A has caused the loss of national tax, and even less can directly confirm that Company A constitutes false invoicing, and pursues its criminal liability. On the one hand, it is necessary to combine the specific situation of Company B, make a comprehensive and overall analysis, and examine whether there is a possibility of truthful invoicing in the case, and on the other hand, it is necessary to examine the subjective aspects of the parties to confirm whether Company A has the subjective intention of false invoicing.

(III) Truthful invoicing does not constitute false invoicing

The third tax violation in this case is that Company B purchased raw coal from a small coal kiln without obtaining a VAT invoice in accordance with the law, and chose to obtain a truthful invoice from Company A instead. There is also a great controversy in practice as to whether the truthful invoicing constitutes false invoicing. Paragraph 2 of Article 1 of Lafa [1996] No. 30, "Anyone who has one of the following behaviors belongs to 'falsely issuing VAT invoices': ...... (3) Carrying out actual business activities, but letting others issue VAT invoices on behalf of himself". special invoices". From this, it can be seen that in the early days, truthful invoicing was also understood as false invoicing. However, in recent years, especially since the reply letter of LRC [2015] No. 58 has been made public, various documents and cases of criminalization of truthful invoicing have emerged one after another, and the question of whether truthful invoicing constitutes false invoicing has triggered discussions in the practical circles.

The progress of the rule of law in criminal justice is reflected in the refinement of the application of law, the application of law that is, the work of legal interpretation, the refinement of the interpretation of the law is manifested in the combination of the social reality of the complexity of the situation, the judgment of the illegality of the act, the culpability, in order to achieve the crime and responsibility and punishment are appropriate. As far as value-added tax is concerned, China has established the tax system of input and output difference tax, however, in the input tax credit link, the purchaser does not confirm the right of input credit by the purchasing situation, but due to the input invoice as the credit voucher, which is caused by the imperfection of the national tax collection and management technology. In the author's opinion, taxpayers should not be asked to bear too many obligations due to the rudimentary tax collection and management. Since the tax system design of input and output tax difference is adopted, the VAT tax obligation should be related to the purchase and sale of goods, and the output tax obligation should be recognized by sales, while the input tax credit right should be recognized by purchases. For taxpayers with real purchases, who have obtained the corresponding input tax credit rights, they should be allowed to offset the tax. In practice, because of the deduction must obtain invoices and other documents, its procurement of goods from a third party after the act of ticket allocation, it is in order to achieve its deduction rights and implementation, that is, Company B ticket allocation to complete the right of input tax credit, did not cause the loss of state tax.

The tax system of input and sales tax difference needs to ensure the integrity of the invoice chain in tax administration. That is, after the seller declares tax in accordance with the law and issues invoices, the purchaser will have the invoices that have been taxed in the previous link to be offset, and ultimately pay the tax obligations arising from the value-addedness of the goods in this link. Some tax authorities believe that if the previous link fails to complete the tax, the purchaser in this link can not be deducted, otherwise it will result in tax loss. This viewpoint overemphasizes the completeness of the VAT chain and unduly increases the purchaser's tax compliance obligations. As a matter of fact, the purchaser cannot control or decide whether the upstream suppliers have completed the tax, for example, in this case, Company B certainly hopes that the small coal kiln can complete the tax in accordance with the law and issue invoices in compliance with the law, but Company B cannot require the small coal kiln to do so, but Company B has really purchased the raw coal and paid for the purchase cost, and should only pay tax on the value-added value of the raw coal in this segment and should not bear the tax obligation of the value-added value of the raw coal in the segment of the small coal kiln. It should only pay tax on the value-added of raw coal in this segment, and should not bear the tax obligation of the value-added of raw coal in the segment of small coal kiln, otherwise, it is equivalent to Company B paying tax on behalf of small coal kiln, which covers up the tax evasion of small coal kiln. Therefore, it is not difficult for Company B to accept the invoices issued by Company A to realize its right to purchase credit in the tax law. As mentioned before, whether Company A's invoicing behavior constitutes false invoicing needs to be judged in conjunction with whether Company B has made real purchases, and the two are interrelated. Therefore, Company B constitutes the acceptance of truthful invoicing, and Company A should not be recognized as false invoicing.

To sum up, the real tax loss in this case is caused by Company A, small coal kiln sales of goods not declared tax, in terms of invoicing behavior, Company A did not sell goods to Company B, invoicing also has no value-added tax obligations, whether or not the tax did not result in tax loss. company B real procurement of goods, enjoy the right of deduction, acceptance of the invoices to obtain the vouchers for the realization of the right of legal deduction, did not result in tax loss. Company B did not pay the tax on the previous sale of the small coal kiln, resulting in a break in the VAT chain, which was due to tax evasion by the small coal kiln, rather than false invoicing, and the loss of tax could not be attributed to the invoicing behavior. Company A and the small coal kiln should be regarded as tax evasion, and the administrative handling of the pre-procedure should be applied, and the criminal responsibility cannot be directly pursued.

III. How to Effectively Respond to Tax-Related Risks in Coal Enterprises

(I) Emphasize the tax inspection procedure to avoid the transformation of administrative responsibility to criminal responsibility

The source of tax-related criminal cases in the coal industry accounts for a significant proportion of the cases referred by tax authorities. Therefore, if an enterprise is audited by the tax authority due to invoice problem, the conclusion of the tax audit often determines the direction of the case. If the tax audit determines that there is an administrative violation in the case, then it is very likely that the case will be transferred to the judicial authority due to the suspicion of a crime, and at this time, the relevant enterprises and personnel will face great criminal risk. Therefore, coal enterprises should attach great importance to the response to the tax audit procedure, especially when the tax authorities have already made the characterization of false opening and tax fraud, the enterprises should be more vigilant, and should move the communication and risk resolution port forward, and intervene through professional tax lawyers in the audit procedure, and communicate with the tax authorities positively and effectively, so as to maximize the risk of resolving the risks in the administrative procedure, and to avoid assuming the criminal liabilities.

(II) Properly responding to tax-related criminal investigations to avoid spreading the risk of criminal liability

Once the audit procedure is not properly responded to, or the public security authorities directly intervene, the coal enterprises and their responsible personnel will face the initiation of criminal case procedures. Once the public security authorities open a case for investigation, the enterprise should grasp the "golden period" of investigation, comprehensively sort out the financial and business information of the business involved in the case and provide it to the public security authorities, and gather all the materials that can prove the authenticity of the transaction individually with sufficient explanations. However, in the stage of investigation, coal enterprises should also beware of the risk of criminal liability for perjury and obstruction of testimony, accurately demarcate the boundary between criminal investigation counseling and illegal collusion, and timely hire professional tax lawyers to intervene in response to the investigation and sorting out the case materials in order to accurately and truthfully reflect the facts of the whole case to avoid the public security authorities as well as the judicial organs to produce bias on the overall characterization of the case to avoid the proliferation of the risk of criminal liability.