In order to solve the problem of ‘source tickets’, a large number of platform enterprises have appeared in the transport, human resources, medicine, renewable resources, non-ferrous metals and other industries, and these platform enterprises, due to the high tax burden, need to rely on the fiscal refund policy to carry out their operations, and obtain the fiscal refund is usually related to the taxes paid in the course of their operations. However, due to the intangible nature of the services provided by the platform enterprises in the transport, human resources and pharmaceutical industries, the platform enterprises in the renewable resources and non-ferrous metals industries have a long trade chain, and the enterprises do not participate in transport, etc., the business authenticity of these platform enterprises is often questioned by the judicial authorities, which in turn leads to the risk of false invoicing, and it has become a difficult problem in the practice of how to evaluate the financial rebates obtained from the taxes paid by the enterprises due to the false invoicing. How to evaluate the financial rebate obtained from the tax paid by the false invoices has also become a difficult problem in practice. In the past, the judicial authorities usually determined that the enterprises used the financial rebate as a tool for profit-making through false invoicing and only pursued the responsibility for the crime of false invoicing of VAT special-purpose invoices. However, some cases now show a different logic of conviction, and the judicial authorities have started to prosecute and adjudicate on the crimes of fraud and false VAT invoices or illegal sale of VAT invoices, which has steeply increased the criminal risk of the platform enterprises. How should they respond to the criminal charge of fraud? This article intends to explore.

I. New judicial practice: platform enterprises to obtain financial return to the fraud offence

Case 1: a spiritual work platform illegal sale of value-added tax invoices in a case, the defendant A and a local government reached an agreement, in the industrial park of the place to set up a spiritual work platform enterprise B, the two sides agreed that a local government in accordance with the enterprise B to pay all the local taxes 30% to the enterprise B to give the fiscal rebate. The procuratorial authorities concluded that A, in order to cheat the local government to support rewards, used Enterprise B under its control to sell VAT invoices to downstream enterprises under the false pretence of flexible labour, under the guise of providing payment services and other services on behalf of the downstream enterprises, with a total tax amount of more than 20 million yuan, in the absence of any real labour services. Later, Defendant A concealed the fact of illegal sale of VAT invoices and cheated the government finance to return more than RMB 8 million, and was prosecuted to the court for several crimes of fraud and illegal sale of VAT invoices.

Case 2: In the case of false VAT invoices issued by a non-ferrous metal trading enterprise, Enterprise C signed a Project Investment Agreement with the management committee of a local government, agreeing that Enterprise C would register in the industrial park there, and that the local retained portion of the urban maintenance and construction tax, education surcharge and local education surcharge formed by Enterprise C would be refunded in accordance with 100 per cent. The court held that Enterprise C falsely issued VAT invoices to downstream enterprises without actual business, with a total tax amount of more than 10 million yuan, and in this way cheated the management committee to support funds of more than 3 million yuan, and the person in charge of the enterprise, D, was to illegally take possession for the purpose of using the false business with the downstream enterprises to the tax authorities to make false tax declarations, with a particularly huge amount of money, and ultimately for the crime of falsely issuing VAT invoices, The person in charge of D was sentenced to 18 years' imprisonment for the offences of false VAT invoicing and fraud.

In the above case, the judicial authorities considered that the acts of falsely issuing VAT invoices and illegally selling VAT invoices belonged to behavioural crimes, and the subject involved in the case had already constituted a tax-related crime by committing the acts of falsely issuing invoices or illegally selling invoices. The subject of the case pays tax based on the falsely issued or illegally sold invoices and then applies for financial reimbursement, which is a new behaviour and cannot be included in the evaluation of tax-related crimes. At the same time, this kind of behaviour has the nature of fraud, and the financial return funds obtained are originated from public property, which should be regarded as the behaviour of defrauding public property. The amount of financial return obtained by the platform enterprise is often very huge, and according to the judicial interpretation of the two high schools on the crime of fraud, if the fraud of public or private property is more than 500,000 yuan, it can reach the sentencing standard of more than ten years. It can be seen that, in the case where the subject in question obtains a financial return that is found to constitute the offence of fraud, its criminal risk increases abruptly.

II.The judicial authorities have determined that the core reason for platform enterprises to obtain financial rebates through false and illegal sale of invoices constitutes the offence of fraud

It is understood that some of the local meeting minutes have clearly stated that ‘where the perpetrator fraudulently obtains local financial incentives, financial subsidies, rebates and other policy concessions through the crime of false invoicing of VAT invoices, and where such policy concessions are in line with the constitutive elements of the crime of fraud, the perpetrator shall be held criminally liable in accordance with the provisions of Article 266 of the Criminal Law’. In practice, the judicial authorities are often influenced by such minutes, in determining that the platform enterprise false invoicing or illegal sale of invoices at the same time, and further determined that the act of obtaining financial rebates in line with the constituent elements of the crime of fraud, specifically.

In terms of subjective purpose and objective behaviour, there was no real transaction of goods or services between the subject of the case and the downstream enterprise, and there was no basis for payment of tax, and it was not possible for it to obtain the fiscal rebate. However, by signing false contracts, creating false transactions, fictitious prices of goods or services, false invoices or illegal sale of invoices to downstream enterprises, fictitious tax obligations to pay taxes, and then deceive the relevant departments of the local government to obtain financial return, it can be determined that it has the purpose of illegal occupation of financial return, and the implementation of the act of a fraudulent nature.

Harmful results, the judicial organs by asking the local government departments concerned, the local government departments concerned said the subject of the case did not know the illegal behaviour, if they know the subject of the case does not have real business will not be given to the financial return, so that the local government departments concerned based on the subject of the case of deception to produce a misunderstanding of the local financial funds disposed of, so that the public property suffered a loss. The public property suffered losses.

III. what should be done if the platform enterprise and related personnel are characterised as fraud?

We believe that the preconditions for the judicial authorities to charge the subject involved in the case as constituting the crime of fraud are still based on tax-related acts, so such cases are different from general fraud cases, so it is necessary to defend from the perspective of the relevant provisions of the tax law, the principles and the criminal law criminal constitutions.

1. from the subjective purpose, the judicial authorities that the subject of the case to illegally take possession of the financial return of the purpose of false invoicing or illegal sale of invoices can not be established.

The precondition for the subject to obtain the financial refund is to pay the tax to the tax authority, and at the same time, the local government only enjoys the right to dispose of the funds belonging to the local finance. Taking VAT as an example, according to the Circular of the State Council on Clarifying the Proportion of Income Tax Revenue Sharing between the Central Government and Local Authorities (Guo Fa [2003] No. 26), the proportion of VAT revenue sharing is 50 per cent for the central government and 50 per cent for the local government. Therefore, the financial rebate granted by the local government to the subject in the case is inevitably less than the tax paid to the tax authorities, i.e., the benefits obtained by the subject are inevitably less than the costs paid by the subject. According to common sense, no one will be in order to obtain a smaller local financial return funds to the tax authorities to pay a large amount of tax, from this point of view, the main body of false invoicing purpose is unlikely to be for the purpose of illegal possession of the local financial return.

2. from the objective behaviour, the subject did not implement deceptive behaviour, the local government departments were not deceived.

On the one hand, the tax declaration information provided by the subject involved in the case was not false. According to the ‘Information attached to the VAT and additional tax declaration form (I)’, the filling of the output tax amount is based on the tax amount of the VAT special invoice issued, the subject involved in the case filled in the declaration form based on the tax amount recorded in the external VAT special invoice in accordance with the objective actual invoicing, and there was no act of falsely filling in the declaration form. On the other hand, most of the agreements signed between the local government and the enterprises did not agree on the authenticity of the business, and only agreed to obtain the financial refund according to the proportion of the tax paid, in other words, the real transaction between the subject and the downstream enterprises is not a prerequisite for obtaining the financial refund, and in the aforesaid case, the subject submitted the tax declaration to the relevant departments of the local government on the basis of the tax paid to the tax authorities. In the aforementioned case, the subject in question submitted tax declarations to the relevant local government departments based on the tax paid to the tax authorities, and did not fictionalise the fact of tax payment in the process of applying for financial refund.

3. In terms of objective results, the local property did not suffer from fraudulent losses.

According to Article 1 of the Provisional Regulations on Value-added Tax (VAT), ‘Units and individuals selling goods or processing, repairing and fitting services, selling services, intangible assets, real estate and importing goods within the territory of the People's Republic of China are taxpayers of value-added tax (VAT), and they shall pay VAT in accordance with these Regulations’. According to this regulation, the VAT tax obligation depends on whether there is sales behaviour or not, without sales, there is no tax obligation, and the enterprise has nothing to do with invoicing, in other words, even if the main body of the case is falsely invoiced, it does not generate tax obligations. In the case where the judicial organ determines that the subject involved has no real business transaction, the subject involved has no sales behaviour, there is no tax obligation to pay VAT to the state, and its invoicing and declaration of payment of VAT to the downstream enterprises can only be the confirmation of VAT, urban construction tax and education surcharge, and payment of tax to the tax authorities which should not be paid by the subject itself, and the increase of the national and local tax, even if the local government gives the subject a financial rebate, it will not have any tax obligation to pay VAT. Even if the local government gives the subject of the case a financial refund, the local government has not suffered any property loss.

4. from the point of view of illegal obstruction, the local government acquiesced in the subject of the case, constituting the victim voluntarily undertook to give up the protection of the criminal law of its interests, the subject of the case does not constitute a fraud offence.

As mentioned above, the agreement signed between the local government and the enterprise only agreed to obtain a financial rebate based on the proportion of the tax paid. In this case, the local government only according to the amount of tax paid by the subject to the subject of the corresponding financial return funds, the subject of false invoices, illegal sale of invoices or lawful way to pay taxes and obtain financial return in no way, such behaviour belongs to voluntarily give up on the supervision of the local financial funds issued by the process of the right to acquiesce to the subject of the subject of the tax increase in various ways to obtain the financial return. Financial return, at the same time, because the premise of financial return is to pay taxes, so this right to give up will not lead to the local financial loss, is not prohibited by the criminal law. Therefore, the subjects involved in the case obtained the financial return funds by means of false invoicing and illegal sale of invoices, which did not infringe the legal interests protected by the criminal law, and did not have criminal illegality.

In summary, the author believes that the subject of the case, even if there is no real transaction in the case of false invoicing or illegal sale of invoices, so as to obtain the financial return also does not constitute a crime of fraud.

IV. Summary

Against the background of the current joint efforts of the eight departments to combat tax-related crimes and investigate irregular financial rebates, enterprises relying on financial rebates need to be careful not to be identified by the judicial authorities as fraudulent when they pay attention to the criminal risk of tax-related crimes while relying on financial rebates to carry out their business. We suggest that, on the one hand, enterprises and related personnel should conduct business based on real transactions, pay attention to standardised and perfect business operation procedures in business operation, and keep complete and coherent business transaction information to prevent being recognised by the judicial authorities as falsely or illegally selling invoices, and, on the other hand, when the judicial authorities open a criminal case against the enterprises and related personnel for the crime of falsely or illegally selling special invoices and the crime of fraud, the enterprises and related personnel should actively seek professional support and legal remedies, and should also be careful to avoid being recognised as fraud by the judicial authorities. On the other hand, when the judicial authorities open criminal cases against enterprises and related persons for the offences of false or illegal sale of invoices and fraud, they should actively seek professional support and legal remedies, and from the perspective of the substance of the transactions and the special characteristics of the industry, they should break down the doubts of the judicial authorities about the false invoicing or illegal sale at the root, and from the perspective of the tax law and the criminal law, they should overrule the reasons for the judicial authorities' determination that the act of obtaining the financial rebate constitutes a fraud.