On January 18, 2024, the Information Office of the State Council held a press conference on high-quality development of tax services in Beijing. Rao Lixin, deputy director of the State Administration of Taxation (SAT), and leaders of relevant departments attended. At the conference, the SAT disclosed the overall results of its work on combating tax-related violations in FY2023, and for the first time made public the regularized mechanism of eight departments across the country for combating tax-related crimes. The author analyzes and reveals the changes and challenges of tax-related risks in key industry sectors in 2024 by combining the four important information on the work of combating tax-related crimes in FY2023 disclosed at the conference.

(Xie Yingjun, Deputy Director of the Information Bureau of the State Council Information Office, presided over the meeting)

 

Heavyweight Information I

The national seven-sector working mechanism to combat tax-related crimes has been expanded to eight sectors

The State Administration for Market Supervision and Administration (SAMSA) officially joined the working mechanism

      At a press conference on January 18, 2024 on the high-quality development of tax services, Huang Yun, spokesman and director of the General Office of the State Administration of Taxation (SAT), answered a question from a reporter from Cover News that this year, in terms of combating tax-related offenses, "we have deepened and expanded the multi-sectoral joint combating mechanism. 2023, the Supreme People's Court and the General Administration of Market Supervision and Administration (GAMSA) joined the regularized joint combating mechanism for tax-related offenses. joint crackdown on tax-related crimes working mechanism, the mechanism member units expanded from six to eight departments, forming a new pattern of work from administrative law enforcement to criminal justice whole chain, integrated crackdown on tax-related crimes."

(Huang Yun, Director of the General Office of the State Administration of Taxation, answering reporters' questions)

      In March 2021, the Central and State Offices issued the Opinions on Further Deepening the Reform of Tax Collection and Administration, and invited the Supreme People's Procuratorate and the State Administration of Foreign Exchange to formally join the working mechanism for cracking down on tax fraud and fraudulent invoicing on the basis of the special crackdowns by the four departments of the General Administration of Taxation, the Ministry of Public Security, the General Administration of Customs, and the People's Bank of China, and expanding it into the working mechanism for joint crackdowns by the six departments.2021 In October 2021, the six ministries and commissions jointly issued the Guiding Opinions on Doing a Good Job of Regularizing the Work of Cracking Down on Illegal and Criminal Offenses of False Tax Issuance and Fraudulent Taxation", which explicitly establishes the working mechanism of regularizing the joint crackdown on false tax issuance and fraudulent tax issuance by the six departments, and requires that all localities continue to maintain the high-pressure situation of cracking down on false tax issuance and fraudulent tax issuance, and to push forward the crackdown on "false enterprises", "false exports" and "false declaration". False export" and "False declaration". By July 3, 2023, the national seven departments to jointly combat tax-related crimes to promote the convening of the work of the meeting, the Supreme People's Court is also included in the regularization of the fight against the "three false" team.

      The author analyzes that market supervision departments have important functions in the unified registration of market entities, unified anti-monopoly law enforcement and management of measurement work, etc. Their inclusion in the regularized joint work mechanism for combating tax-related crimes will further share various types of information on market entities with tax departments, which will play an important role in investigating and dealing with tax-related illegal activities, such as shell enterprises' fraudulent opening, concealment of income from equity transfers, malicious tax evasion, and local tax concessions violations. Illegal activities play an important role.

      For one thing, a large proportion of the cases of false openings that broke out in practice were violent false openings by shell companies, and one of the characteristics of shell companies is that they do not have paid-in capital, and they fled and lost contact after violent false openings. Market supervision departments to publicize and share the amount of corporate shareholders' contributions and paid-in capital, will become the tax department to identify shell companies, to combat the illegal crime of false openings to provide a powerful hand.

      Secondly, taxpayers should pay income tax on the transfer of equity, and go through the procedures of equity change. If the market supervision department suggests that there is public information on the change of equity under the name of the enterprise, but the tax system can not find the tax declaration record of the original shareholders, it is very easy to cause the original shareholders not to declare tax or even tax evasion investigation and punishment.

      Third, the market supervision department is in charge of anti-monopoly law enforcement agencies, comprehensively clean up all kinds of regulations and practices that impede the unified market and fair competition, and eliminate local protection and administrative monopoly is also the proper meaning of its work. With the gradual cleanup of undue market intervention and subsidy or rebate policies linked to tax and fee income, the tax authorities will pay more attention to the application of tax incentives in violation of the law, and even make retrospective adjustments to taxpayers who have already applied local "small policies".

      Fourth, the market supervision department is also in charge of the main body of the national measurement work, to the refined oil retail industry, for example, in the gas station special inspection action since 2023, the market supervision departments around the integrity of the seal of the gasoline dispenser, whether the measurement of the gas gun is accurate to carry out a focus on whether to check, crack down on gas stations unauthorized alteration or dismantling of the gasoline dispenser, stealing and replacing the measurement of measuring device motherboard and measuring chip and other measurement of illegal behavior, this This also provides clues for the tax department to investigate and deal with tax evasion through cheating on gasoline dispensers.

 

Heavyweight Information II

A total of 135,000 taxpayers involved in tax violations were investigated and dealt with in 2023

In 2023, a total of 181 billion yuan of tax was recovered

      In 2023, a total of 8,228 tax-related criminal suspects were subject to compulsory measures.

      Huang Yun, Director of the General Office of the State Administration of Taxation (SAT), disclosed detailed data in response to a question about the results of the work of the tax authorities in combating tax-related crimes in 2023: "In 2023, the tax authorities investigated and dealt with 135,000 suspected unlawful taxpayers in accordance with the law, recovered a total of 181 billion yuan of various types of tax losses, cooperated with the public security departments in taking 8,228 suspects with coercive measures, and 539 criminal suspects surrendered, strongly maintaining the rule of law and fair economic and tax order."

      Recalling the data for 2022 disclosed at the SAT press conference on January 31, 2023, the national tax inspection departments cumulatively identified 7,813 enterprises suspected of fraudulently or illegally obtaining tax credits and refunds, and recovered a total of 15.5 billion yuan in tax credits and refunds and various types of tax losses." After comparing the data of the two years, it can be seen that in 2023, the tax departments recovered more than ten times as many tax losses of all kinds as in 2022, and the number of investigated and dealt with suspected unlawful taxpayers is even more incomparable with that of 2022, which can be seen that in 2023, the tax departments' efforts to crack down on tax-related illegal behaviors have been strengthened as never before. On the one hand, the tax department cooperated with the public security department to take coercive measures against 8,228 criminal suspects, and the criminal risk faced by taxpayers suspected of tax violations had a concrete and intuitive data expression, roughly calculated, for every 50 taxpayers investigated and dealt with, there were 3 suspects were transferred to the judiciary to pursue prosecution, and the increase in the criminal risk needs to be paid attention to by taxpayers. On the other hand, the tax department recovered 181 billion yuan of all kinds of tax losses in 2023, which is both a medal for the tax department to recover losses and combat tax-related criminal behavior, and also a wake-up call for the majority of taxpayers. Taxes come from taxpayers, and a rough estimate of the data released at the press conference shows that the average taxpayer has to bear more than a million dollars in taxes, plus late fees and fines, the financial burden on taxpayers will be even heavier. In such a severe tax regulatory environment, for the survival and development of private enterprises should be more alert to the risk of tax-related violations, strengthen tax compliance, to avoid administrative and criminal liability.

 

Heavyweight Information III

These areas have become the key objects of tax-related criminal pursuit of responsibility

      At the press conference on the same day, the SAT focused on the key objects of tax-related criminal pursuits in 2023. first, focusing on tax-related criminal acts such as false invoicing by fake enterprises, fake export fraudulent tax refunds, and fake declarations of fraudulent concessions, the SAT actively joins hands with relevant departments to carry out precise crackdowns, investigate and punish a number of law-breaking enterprises, and knock down a number of criminal groups. in 2023, the cumulative number of cases of law-breaking cases of fraudulent tax concessions was investigated and dealt with 5,042 cases, checked 2,599 export enterprises suspected of fraudulently obtaining export tax refunds, and recovered export tax refund losses of about 16.6 billion yuan; second, the multi-departmental joint deployment of the Sharp Sword 2023 special action, through cross-regional and cross-departmental data sharing and joint research and adjudication, accurately cracked down on 127 occupational tax-related criminal groups, and captured 1,619 criminal suspects.

      Since August 2018, the tax authorities have been upholding the attitude of strictly investigating and cracking down on "fake enterprises", "fake exports", "fake declarations" and other serious illegal behaviors without letting up, by By investigating and dealing with a number of illegal enterprises, knocking down a number of criminal gangs, and severely punishing a number of criminals, a strong deterrent to lawbreakers has been maintained. Moreover, the tax authorities have focused on illegal and criminal behaviors such as gang-type, trans-regional, false invoicing and false enhancement of items to cheat tax credits and refunds, strengthened joint research and judgment and intelligence guidance, and resolutely cracked down on them with a zero-tolerance attitude to form an overwhelming momentum in the fight against fraudulent tax credits and refunds. Against the background of coordinated and intelligent supervision of various departments, tax-related crimes are easily exposed, and taxpayers must take honest operation as a foothold and strengthen tax compliance to avoid going astray and entering the field of criminal investigation.

 

Heavyweight Information IV

These areas have become the focus of the tax department's supervision

      At the press conference, the State Administration of Taxation disclosed that this year, the tax department will "increase remediation efforts in key industries and key areas. Focus on key industries and key areas of tax-related illegal risks to carry out special rectification, focusing on investigating and dealing with a number of major cases of tax evasion and avoidance, in particular, the regular strengthening of tax supervision in the field of entertainment, the organization investigated and dealt with a number of acting stars and network anchors tax evasion typical cases, a strong standardization of the industry tax order, and to promote the healthy development of the relevant industries."

      According to the author's statistics, among the typical cases officially reported by the SAT since 2023, there are 9 cases involving taxpayers violating the tax preferential policies such as enjoying R&D expenses and adding credits and deductions, 8 cases involving tax evasion at gas stations, 8 cases involving tax-related intermediary violations, and 7 cases involving tax evasion and avoidance of acting stars and network anchors, and more than a dozen of tax personnel have been punished for the violation of applying the tax preferential policies and have even been pursued for More than a dozen tax officials were punished or even held criminally liable for violating the application of tax incentives. In addition, there were some cases involving pharmaceuticals, renewable resources, and invoicing of agricultural products. It is obvious that the purchase and sale of commodities, tax-related intermediaries, network entertainment, as well as pharmaceuticals, production and processing of agricultural and sideline products, and the acquisition and utilization of waste materials are still the key industries and fields to be supervised by the tax authorities.

(Rao Lixin, Deputy Director General of the State Administration of Taxation, answering reporters' questions)

      In addition, Rao Lixin, deputy director of the State Administration of Taxation, pointed out at the press conference that "the tax department will conscientiously implement the deployment requirements of the CPC Central Committee and the State Council on accelerating the construction of a national unified big market, adhere to strict norms and fair and civilized law enforcement, continue to optimize the tax levy and administration service initiatives, and seriously investigate and deal with tax-related problems in the illegal investment promotion, to help accelerate the construction of an efficient and standardized, fair competition and fully open national unified big market." By coincidence, the National Audit Work Conference held on January 11, 2024 also revealed in-depth problems such as the introduction of "small policies" and the formation of "tax depressions" in investment promotion in some places in violation of the law, and called for the serious investigation and handling of irregular tax rebates, and put forward targeted and operational recommendations to carry out tax collection and management. In addition, the company has put forward targeted and operational suggestions, carried out tax collection and management audits, and kept a close eye on the valuable financial funds.

      Previously, financial incentives, tax rebates have been local investment tools, but also some taxpayers rely on the paradise, but in recent years these policies have generated a lot of rationality and legitimacy of the controversy is being gradually cleaned up. Then, those who rely on the depth of financial incentives and new industries will inevitably be affected, the business operation how to get into a dilemma. In order to continue their business, taxpayers will have to strengthen prior compliance and take the initiative to communicate with the tax authorities at the beginning of their business to find out whether the business is compliant and whether the policies are applicable.

 

Conclusion

      Combined with the joint press conference of the State Council Information Office and the State Administration of Taxation and the 2024 National Audit Work Conference, the situation of tax collection and management in 2024 shows a clear trend of precise strikes, joint strikes, in-depth strikes, and focused strikes against tax-related illegal and criminal activities. Relevant enterprises in high-risk industries and fields should actively pay attention to the focus and changes of tax-related risks in the course of their operations this year, grasp the pulse and dynamics of the trend of tax collection and management, actively carry out tax health checks and self-inspections, ensure that their own business models are in compliance with the provisions of the tax law, and manage all types of tax-related internal and external risks by establishing a systematic and complete internal management mechanism for tax compliance, properly dispose of risks and resolve tax-related disputes, and actively The company also needs the professional support of tax lawyers and strives to realize compliant operation and sustainable healthy development.

(News source: Official website of State Administration of Taxation, Photo source: State New Website)