Among the cases of fraudulent export tax rebates, agricultural products are always a topic that cannot be avoided. Recently, there has been an outbreak of a number of export enterprises due to the issue of agricultural products, characterized as fraudulent export tax rebates, and even be transferred to the public security organs to pursue criminal responsibility. Among them, the risk has always erupted around the acquisition of agricultural products invoice. In practice, there are a number of acquiring enterprises did not fill out the invoice information in a compliant manner, resulting in the acquisition of agricultural products invoices were recognized as fraudulent, and ultimately implicated in the export enterprises. To this end, this case cuts through a case of fraudulent export tax rebates, analyzing the causes of agricultural products repeatedly involved in tax fraud risk and its response to the readers.

I. Case observation: because the input invoice is characterized as false opening, foreign trade company subject to treatment and punishment

(i) Announcement of the instrument to disclose the basic facts of the case, tea purchasing link is suspected of false invoicing

Recently, a local tax bureau in Fujian Province served Fujian A Trading Company with a Notice of Tax Administrative Punishment and a Decision on Tax Treatment on its official website. According to the contents of the "two books", mainly:

Company A is a foreign trade enterprise operating in the export of tea, and during the period from September 2019 to March 2023, the company allowed nine companies, including Fujian Certain Tea Co. Ltd, to issue VAT invoices for Company A that did not correspond to its actual operation, totaling 2,124 falsely issued special invoices involving an invoice amount of 209 million yuan and a tax amount of 27.18 million yuan. Among them, the name of the goods recorded on the VAT invoices obtained by Company A was "tea", specifically, including Chinese white tea and oolong tea.

Tea is a typical type of agricultural products, therefore, this case still involves the false filling of invoices for the purchase of agricultural products from the source. As the "Notice on VAT and Consumption Tax Policies for Exported Goods and Services" (Cai Shui [2012] No. 39) stipulates that foreign trade enterprises directly obtaining invoices for the acquisition of agricultural products are subject to the export tax exemption policy, therefore, some foreign trade enterprises will graft on one or several acquiring enterprises in the front-end purchasing process, and through the self-filling of invoices for agricultural products acquisition by these acquiring enterprises, they will issue for the foreign trade enterprises tax refunds that can be applied for. VAT special invoices can be issued for foreign trade enterprises to apply for VAT refund. However, the risk of falsely filling in agricultural products purchase invoices will still be continuously transmitted with the flow of invoices.

(ii) The punishment is only "stopping the right of export tax refund", which means that the public security authorities may have already opened an investigation case.

The special point of this case is that the announcement of the "Tax Treatment Decision" has made it clear that the enterprise involved in the case constitutes fraudulent export tax rebates, and the amount of money has reached the standard of particularly large, but it does not contain the transfer to the public security organs. However, the tax authorities in the "Tax Administrative Penalty Matters Notice", only to the enterprise involved in the proposed administrative penalty "stop the right to export tax refunds", but not to the enterprise involved in the fraudulent export tax refunds made the fraudulent amount of 1-5 times the administrative penalty.

According to the Opinions on Strengthening the Convergence of Administrative Law Enforcement and Criminal Justice (Zhongban Fa [2011] No. 8), when administrative law enforcement agencies transfer suspected criminal cases to public security agencies, "in principle, the decision on whether to impose administrative penalties should be made after the public security agencies have decided not to open a file or to withdraw the case, the People's Procuratorate has made a decision not to prosecute, and the people's court has made a judgment of acquittal or has exempted from criminal punishment". , before deciding whether or not to impose administrative penalties."

Therefore, synthesizing the above provisions, in this case, the tax authorities did not issue an administrative fine, it is very likely that the public security organs have filed a case for investigation.

(iii) Tax Treatment Reveals Risk of Tax Fraud, VAT and Income Tax Adjusted

The tax authorities in this case handled the case quite heavily, and basically adjusted all the taxes that could be adjusted and recovered. Including:

1. Recovering 26.28 million yuan of export tax refund from the enterprise involved in the case, and 890,000 yuan of unrefunded tax is no longer refundable;

2. 23.61 million yuan of value-added tax (VAT) was levied on export sales as if they were domestic sales; urban construction and surcharges were levied.

3. Enterprise income tax was authorized and 1.01 million yuan of enterprise income tax was recovered.

4. The above VAT, surtax, enterprise income tax, and levy late payment fees.

In summary, if the enterprise is suspected of fraudulent export tax rebates, its related tax adjustments, administrative responsibility, criminal liability are extremely heavy, must pay attention to strengthen compliance. In addition, due to the special nature of agricultural products, resulting in its easy to be used for tax fraud or false opening, the risk is high, easy to be involved in the tax administrative and criminal risks, the need for a large number of taxpayers to pay attention to the risks involved. Next, this article will analyze the factors of agricultural products suspected of false opening and tax fraud risk, and put forward some defense points.

II. Risk Factors: Agricultural products are a key regulatory area due to their sensitivity.

(i) Industry factors: the sales of agricultural products are more decentralized, and the phenomenon of dependency and agency is common.

The characteristic of "self-filling and self-canceling" of the agricultural products purchase invoice has led to some restrictions on the issuance of agricultural products purchase invoices in order to avoid the potential risk of false invoicing. For example, a region has issued a policy to regulate the issuance of agricultural products acquisition invoices, which requires that: 1. acquisition invoices are limited to the acquisition of self-produced agricultural products issued by agricultural producers; 2. taxpayers should issue acquisition invoices according to the specified time limit, number order, pen-by-pen, and accurately record the seller's name, detailed address, and at the same time, indicate in the Remarks column the seller's identity card number and contact telephone number, and shall not issue the invoices according to the number of sellers or the number of acquisition operations in aggregate. Not by multiple sellers or multiple acquisitions of business summary issued. Acquisition of goods weighing slips, warehousing slips, transportation cost settlement documents, receipt and payment vouchers and other original documents should be properly stored in accordance with the provisions of the purchase invoices corresponding to the content of the invoice. 3. Purchase invoices are limited to be applied within the county-level administrative divisions.

However, the acquisition of agricultural products for the whole country, and due to the sale of agricultural products out of a huge number of agricultural producers, and very decentralized, leading to the application of agricultural products acquisition invoices there are huge difficulties.

On the one hand, its decentralized sales model and the participation of a large number of natural persons, resulting in the purchase of agricultural products is usually faced with the purchase of enterprises, "second-hand traffickers", the purchase of large households, distribution centers, it is difficult to trace the initial sales of agricultural products to the individual. In practice, some purchasing enterprises fill in the purchase of agricultural products invoices to purchase large households, agents, in violation of the provisions of the agricultural products must be filled in the information of the producer.

On the other hand, there are regional restrictions on the application of the agricultural products purchase invoice. In the early years, the purchase of agricultural products invoices are restricted to use in the county-level administrative areas, in recent years, some provinces have expanded to the use of the provincial administrative areas, but generally may not be used across provinces. This has brought difficulties to the acquisition of agricultural products from the acquisition of enterprises from other provinces. Some purchasing enterprises will purchase agricultural products of corporate employees, intermediaries fill in as farmers.

Due to the special nature of the agricultural products industry, it has brought considerable challenges to issuing invoices for the acquisition of agricultural products. This decentralization and the involvement of natural persons have, to some extent, increased the risk of false invoicing and led to some acquiring enterprises being caught in the risk of false invoicing and tax fraud.

(ii) Regulatory factors: Agricultural products have always been a key area of regulation

In response to the issue of false invoicing for the acquisition of agricultural products, the State Administration of Taxation (SAT) has been continuously strengthening its regulatory efforts. At the regular press conference in May 2023, the leaders of the General Administration of Taxation explicitly mentioned that agricultural products and pharmaceuticals belong to the key areas of concern, stating that it will continue to intensify its efforts to crack down on false invoicing, and deal with false invoicing with zero tolerance.

In the tax cases exposed by the General Administration in 2023, there was no lack of agricultural products purchase invoices. In June 2023, the Directorate General exposed a case of false invoicing of agricultural products purchase invoices and false VAT invoices in Hunan. The criminal gang obtained false farmer information by forging identity documents and falsely issued 15,000 agricultural product acquisition invoices amounting to 1.332 billion yuan. At the same time, in the absence of real business, 13,700 VAT special invoices were issued to a number of enterprises, with a total value of 1.364 billion yuan in price and tax.2023 In April, a case of fraudulent issuance of invoices for the purchase of agricultural products and fictitious export of tea to cheat export tax refunds in Hubei Province was brought to light. The perpetrator took the means of falsely opening invoices for the purchase of agricultural products, smuggling back exported goods and exporting them in a circular manner, and falsely clearing foreign exchange to fraudulently obtain export tax refunds amounting to 19.924 million yuan.

These cases involved a number of provinces, involved huge amounts of money, and seriously disrupted the tax order. These cases show that the problem of false invoicing for the purchase of agricultural products still exists, and the amount involved is huge. At the same time, it also reminds the majority of agricultural producers and operators to raise their legal awareness, issue and use invoices in accordance with the law, and work together to safeguard tax fairness and social public interests.

(iii) Enterprise factors: irregularities in the procurement of agricultural products for export and lack of awareness of evidence

In the field of purchasing agricultural products, a large number of purchasing enterprises are small in scale, lack of professionals and insufficient knowledge of tax law, resulting in failure to fully retain information on the authenticity of goods in the purchasing process. Once faced with tax audits or economic investigations by public security, these enterprises often find it difficult to effectively prove their case due to insufficient evidence.

In practice, we note that many acquisition enterprises, although they insist that their acquisition behavior is real, the goods are real, only the invoice information is inaccurate, but subjectively do not have the intention of false billing. However, they often lack the necessary evidential information, such as photographs, transportation information and inventory records, making it difficult for the tax authorities to verify the authenticity of the data on the acquisition of agricultural products declared by the enterprises. Under such circumstances, these acquiring enterprises are easily characterized as false invoicing and even face criminal risks.

Therefore, for agricultural product acquisition enterprises, establishing a sound internal management system, strictly abiding by tax regulations and ensuring that complete information on the authenticity of goods is retained during the procurement process are important measures to prevent the risk of false invoicing. At the same time, the tax department should also strengthen the supervision of the agricultural products acquisition industry and improve the tax law awareness and compliance of enterprises in order to maintain the stability and fairness of the tax order.

III. Risk response and defense: based on the current situation of the industry and claiming business authenticity

(i) Protection of Legal Interests: Understanding the Institutional Arrangement of "Deemed Taxed" for Sales of Agricultural Products

Agricultural producers are exempted from tax on the sale of agricultural products, and purchasing enterprises that purchase agricultural products directly from agricultural producers can provide input tax credits by filling out purchase invoices for agricultural products. This is usually considered a tax benefit, which means that enterprises can only obtain the right to offset inputs if the filling of invoices for agricultural products is completely legal and compliant. At the export stage, it is the exported goods that have the substantive elements for a tax refund.

In reality, however, this institutional arrangement is not a purely tax-preferential policy, but is designed to avoid double taxation. According to the book "Operational Guidelines for Comprehensively Promoting Camp Reform and Increase in Business" published by the State Administration of Taxation, it is pointed out that: "Farmers have paid VAT on the fuel, agricultural machinery and other means of production purchased for the production of agricultural products, and the price of the agricultural products includes a part of the VAT, which means that taxpayers who have purchased tax-exempted agricultural products have to a certain extent "burdened" with VAT. That is to say, the taxpayer who purchases tax-exempt agricultural products is to some extent "burdened" with VAT. At this point, if taxpayers purchasing tax-exempt agricultural products are not allowed to calculate input tax deductions, then this will result in a certain degree of double taxation, and may also lead to agricultural product purchasing units taking advantage of this to depress the price of agricultural products, thereby reducing the income of farmers and jeopardizing the interests of farmers." In other words, agricultural products produced by agricultural producers are "taxable goods" and should be allowed to be deducted from the input tax by the purchasing enterprises.

Some courts have held that agricultural products produced by agricultural producers belong to the category of "goods deemed to have been taxed". In the author's view, this is only a difference in wording, but in essence, it also recognizes the "taxed" characteristics of agricultural products. For example, an article published in the People's Court Newspaper by a staff member of Xiangtan Intermediate Court, "Whether Counterfeiting Self-produced Goods for Export and Obtaining Export Tax Refund Constitutes the Crime of Fraudulently Obtaining Export Tax Refunds", which puts forward the point of view that "agricultural products, such as sausages, should be regarded as taxed goods even though they have not been actually taxed domestically", is an application of the above tax law theory, highlighting its professionalism and its understanding of the tax law of agricultural goods. This is the application of the above tax law theory, highlighting its specialization and thorough understanding of agricultural goods.

The crime of obtaining export tax rebates by deception infringes on two legal interests: one is the national export management system, and the other is the national export tax rebates. Among them, it is clear from the context of the legislation that the offense places special emphasis on the amount of the export tax rebate, and therefore centers on the protection of the national export tax rebate. Zhang Mingkai also believes that the crime of fraudulent export tax rebate essentially has the attributes of fraud. Therefore, only in the case that the perpetrator does not export the real goods, or the exported goods are "not taxed", and the state tax is fraudulently obtained and the state incurs a loss, can it be recognized as the crime of tax fraud.

If the fact that the perpetrator exports agricultural products is true, i.e., there are real procurement, processing and export of agricultural products, just because the invoice for the purchase of agricultural products is not filled out in a standardized manner, the act of obtaining the export tax rebate "does not cause the state organs to fall into the wrong understanding and dispose of the property", and will not cause the loss of state tax, and will not result in the loss of state tax, and will be used in the administration for recovery of tax, deemed domestic sales processing, and the disposal of tax, or the disposal of tax. Taxes, regarded as domestic sales can be dealt with, it is not appropriate to be recognized as the crime of fraudulent export tax rebates.

(ii) Cargo factor: it is claimed that the authorities handling the case have not actually ascertained the authenticity of the goods and provided clues about the goods.

Due to the special nature of agricultural goods, they are not easy to be preserved, which makes it more difficult to retain information about the authenticity of goods in the procurement process. Some agricultural products purchasing enterprises also lack the corresponding evidence awareness, when faced with tax audit or public security organs of the investigation, due to the lack of effective information on the authenticity of the goods, it is often difficult to prove their innocence. Tax and public security authorities also face challenges in handling such cases due to the difficulty of tracing the goods. In some cases, the public security authorities will use factors such as non-compliance in filling out invoices as an inference to conclude that there are no actual goods, thereby creating criminal risks for the enterprises involved.

One of the more common practices is for the public security authorities to question the farmer recorded on the invoice as to whether there were actual goods sold. At this time, the invoices may be recorded on the enterprise's acquisition of employees, goods to the collection of large households, etc., which may make unfavorable testimony to the enterprise. And the enterprise to the authenticity of the real purchase, and can not find the real farmers who sold the goods at that time, and thus can not provide effective evidence.

We believe that the authenticity of the goods is always the first priority when dealing with the risk of fraudulent export tax rebates. If necessary, the enterprise can try to restore the original appearance of the business at that time through the payment of funds, chat records, transportation documents and other types of evidence, to explain to the case officer that there is really procurement of goods, only there may be the phenomenon of non-compliance with the filling of invoices, but does not have the subjective intent to fraudulent export tax refunds, and did not cause the flow of tax, etc., to strive for the optimal result.

(iii) Amount of tax: claiming that the amount of tax fraud cannot be projected through invoices and foreign exchange information

The specific amount of fraudulent export tax rebates is a key element in the conviction and sentencing of tax fraud. If the specific amount of tax fraud can not be identified, the court can not make the final characterization and judgment. In practice, there are some tax, public security and other case-handling organs indirectly deduce the specific amount of tax fraud through the agricultural products purchase invoice, foreign exchange and other information.

For example, in the judgment of No. 406 and 482 of (2021) Xiang 0981 criminal case, the public prosecution authorities added up all the amounts of the purchase invoices of agricultural products and multiplied them by the tax rebate rate, which directly arrived at a fraudulent tax amount of 17,890,000 yuan. However, the court found this calculation insufficiently effective. The court pointed out that an attempted tax fraud must have the state tax actually refunded to the taxpayer, and the portion not actually refunded, or the portion for which the taxpayer had a real export business, should be deducted from it. Therefore, after review, the court found that the export tax refund declared with false export documents was actually obtained 1.35 million yuan.

IV. Summary: Agricultural products acquisition and export enterprises should pay attention to compliance building

Due to the risk of false invoicing of agricultural products acquisition, export enterprises are often involved in the risk of fraudulent export tax rebates. The majority of export enterprises should pay attention to the compliance of the acquisition of agricultural products to avoid tax-related risks. Specifically, it can be done:

First of all, enterprises should understand and comply with relevant tax laws and regulations and the provisions of the invoicing and management of the acquisition of agricultural products, for the circumstances that should not be issued, it is best to ask the seller to issue special invoices, do not arbitrarily fill in the invoices of agricultural products.

Secondly, retain complete information on the authenticity of the goods. In the procurement process, enterprises should retain complete information on the authenticity of the goods, such as photographs, transportation information, inventory records and so on. Such information can be used as strong evidence to prove that the enterprise is legally compliant and reduce the risk when being investigated by the tax department or public security organs.

Again, enterprises should conduct regular self-inspection and internal audit. Agricultural products purchasing enterprises should conduct regular self-inspection and internal audit to detect and correct potential invoice risks in a timely manner. Through self-inspection and internal audits, enterprises can ensure their compliance and reduce the criminal risks associated with false invoicing.

Finally, companies can seek professional legal and tax advice. For agricultural product acquisition businesses involving complex legal and tax issues, enterprises can seek professional legal and tax advice. By communicating and cooperating with professionals, enterprises can obtain more accurate legal and tax advice to better avoid invoicing risks. Professionals can also be engaged to conduct employee training and education activities to enhance employees' compliance and risk awareness.