Editor's Note: Recently, the Supreme People’s Court released eight typical cases of crimes harming tax collection and management, three of which involve fraudulently obtaining export tax rebates. The methods employed in these cases include circular imports and exports, buying export documents and matching them with invoices, and misdeclaring exports, sending a strong signal of continued strict enforcement. To gain a deeper understanding of the current judicial stance, this article will use these three cases as examples to analyze the key legal issues in depth, systematically outline the current judicial consensus on export tax rebate fraud, and, based on this, forecast regulatory trends for 2026 against the backdrop of deepening "data-driven tax governance."  

I. Case 1: Circular Exports—The Key to Export Tax Rebate Fraud Lies in the Import Phase  

(1) Case Summary  

The defendant, Huang Moumou, was the legal representative of Mei Mou Company, responsible for its overall management and operations. The company primarily engaged in the procurement, processing, and import-export of cashmere products and textile raw materials.  

From January 2009 to December 2012, Huang Moumou and others, through Mei Mou Company, exported textile yarn to Hong Kong either via self-operated exports or by entrusting foreign trade companies as agents. Once the goods arrived in Hong Kong, the group immediately declared the same batch of goods for import under the guise of "processing with imported materials." The goods were then transported to Shanghai or Hebei, repackaged, and re-exported under Mei Mou Company’s name, forming a closed-loop cycle of "export–re-import–re-export."  

To complete the false trade cycle, Huang Moumou and others transferred funds through personal accounts to underground banks, which then facilitated the return of funds under the guise of "foreign merchant payments" through multiple companies controlled by them in Hong Kong, disguising it as legitimate foreign exchange settlement. Based on this fabricated trade, Mei Mou Company and the related foreign trade companies applied for and fraudulently obtained export tax rebates. Investigations revealed that Huang Moumou and others fraudulently obtained over RMB 870 million in national export tax rebates through this method.  

The court of first instance found Huang Moumou guilty of fraudulently obtaining export tax rebates, with the amount being particularly large, and sentenced him to life imprisonment, deprivation of political rights for life, and confiscation of all personal property. Huang Moumou appealed, but the second-instance court rejected the appeal and upheld the original judgment.  

(2) Case Analysis  

1. The boundary between legitimate circular trade and tax fraud crime lies in whether it causes loss of tax revenue.  

According to Item 6, Paragraph 7 of the "Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Fraudulently Obtaining Export Tax Rebates," circular import-export activities can constitute tax fraud. However, the core of the crime is not the "circular" form itself but whether the activity causes loss of national tax revenue. If a company declares compliance and pays taxes at each stage according to law, its circular activities fall within the scope of operational freedom. In this case, Huang Moumou and others abused the bonded policy for "processing with imported materials," evading the tariffs and import value-added taxes that should have been paid upon re-importation. This led to the state "refunding" taxes that were not actually paid in subsequent export stages, causing fiscal loss—the essence of tax fraud.  

2. Judicial distinction between smuggling and tax fraud purposes.  

In this case, Huang Moumou’s actions of misdeclaring the nature of trade, importing bonded materials duty-free, and unauthorized domestic sales could themselves constitute the crime of smuggling ordinary goods. However, the judicial authorities ultimately convicted him of fraudulently obtaining export tax rebates, following the principle of "implicated offense" in criminal law theory. This means that when the means of a criminal act (smuggling) and its purpose (tax fraud) violate different criminal charges, the heavier offense is applied. This approach more comprehensively reflects the overall social harm of the ultimate goal to defraud the state of tax rebates. Of course, some typical judgments hold that whether smuggling and tax fraud constitute implicated offenses depends on the specific spatiotemporal relationship between them. For example, in the reference case No. 2023-05-1-081-001 in the People’s Court Case Database, "Liu Mou A and 11 Others Smuggling Precious Metals and Fraudulently Obtaining Export Tax Rebates," the court held that the spatiotemporal relationship between smuggling precious metals and fraudulently obtaining export tax rebates in that case did not rise to the level of a criminal-law implicated relationship. The smuggling involved in fraudulently obtaining export tax rebates should not be considered an implicated offense. Ultimately, the case was deemed to constitute multiple crimes of "smuggling precious metals" and "fraudulently obtaining export tax rebates," with combined punishments.  

Returning to this case, whether circular exports constitute the crime of fraudulently obtaining export tax rebates does not depend on whether the goods are "circular" but on whether, in the process, the entity evades import taxes, fabricates trade links, and fraudulently obtains export rebates it is not entitled to.  

II. Case 2: Buying Export Documents and Matching Invoices—A Typical Case of Fraudulently Obtaining Export Tax Rebates  

(1) Case Summary  

From 2017 to 2022, the defendant Luo Moumou, without actually exporting goods, arranged for Shen Moumou and others (handled in separate cases) to purchase export declaration documents from others who did not need tax rebates—a practice known as "buying documents." Subsequently, Luo Moumou used shell companies he actually controlled—such as Nanchang Xiao Moumou Clothing Co., Ltd. and Nanchang Lin Mou Clothing Co., Ltd.—to issue VAT special invoices matching the declaration documents, completing the "invoice matching" step. Investigations revealed that through these means, he fraudulently obtained approximately RMB 140 million in national export tax rebates (of which RMB 510,000 had been declared but not actually refunded).  

The court held that the defendant Luo Moumou and others, by falsely declaring exports, fraudulently obtained export tax rebates, with the amount being particularly large, thus constituting the crime of fraudulently obtaining export tax rebates. Luo Moumou played a major role in the joint crime and was considered a principal offender. However, he voluntarily pleaded guilty and accepted punishment, returned RMB 1 million in illegal gains, and was thus given lenient punishment. Ultimately, Luo Moumou was sentenced to 15 years in prison and fined RMB 200 million. Illegal gains were recovered according to law. The judgment has taken effect.  

(2) Case Analysis  

"Buying documents and matching invoices" is currently the most industrialized and harmful typical model of fraudulently obtaining export tax rebates. Its essence lies in piecing together documents to fabricate the fact of export trade, making it a long-standing key target for judicial and tax authorities.  

At the policy level, the "State Administration of Taxation Announcement on Matters Concerning Optimizing Pre-payment Corporate Income Tax Returns" (State Administration of Taxation Announcement No. 17 of 2025) officially took effect on October 1. It explicitly requires export agents not only to declare export agency fees as operating income but also to accurately report the actual client information during the pre-payment stage. Failure to fulfill these reporting obligations will result in the related export agency business being treated as self-operated, with the agency company bearing the corresponding corporate income tax liability. This regulation significantly strengthens the collection and management of corporate income tax for exports and is expected to profoundly impact the industry ecosystem, particularly posing severe challenges to companies long reliant on irregular models like "buying documents and matching invoices."  

At the technical level, with the deepening collaboration between the "Golden Tax Phase IV" and the "Single Window + Blockchain" system, tax and customs data have achieved comprehensive linkage and cross-verification. This has drastically reduced the operational space for illegal activities such as issuing fraudulent invoices and fraudulently obtaining export tax rebates, which often accompany "buying export documents." Related high-risk enterprises have been placed under key supervision.  

Therefore, export enterprises should adhere to genuine business practices, declare truthfully, handle rebates compliantly, and properly retain relevant business documents for inspection. If facing risks of fraudulent invoicing or tax rebate fraud, they should promptly engage professional lawyers to communicate with tax authorities, explaining the authenticity of the business and declaration materials. If necessary, administrative relief procedures should be used to protect their legitimate rights and interests, preventing administrative penalty risks from escalating into criminal risks.  

III. Case 3: Misdeclared Exports—How to Determine Formal Compliance vs. Substantive Illegality  

(1) Case Summary  

In the first half of 2016, the defendant Yao Moumou, legal representative of defendant company Dong Mou Company, reached an agreement with Xin Mouhang Company for Dong Mou Company to sell silver to Xin Mouhang Company. As silver is subject to national export quota license management and, by regulation, ineligible for export tax rebates, Yao Moumou devised a plan to superficially process domestically purchased silver with backplanes, disguising it as "sputtering target assemblies," and exporting it by fabricating transaction links and misdeclaring product names.  

In practice, Dong Mou Company first sold the processed "sputtering target assemblies" to other affiliated companies controlled by Yao Moumou, which then resold them to Hong Kong-based Xin Mouhang Company. Upon receipt, the latter immediately disassembled the components, smelted the silver back into ingots, while the backplanes were returned to Dong Mou Company via designated companies for reuse. Settlement was executed based solely on the actual value of the silver minus refining fees.  

Investigations revealed that Dong Mou Company, Yao Moumou, and others used this method to export a total of 609,377 kg of silver, declaring and obtaining over RMB 400 million in national export tax rebates.  

The court of first instance found that Dong Mou Company and Yao Moumou’s actions constituted fraudulently obtaining export tax rebates. Yao Moumou was a principal offender, but the company voluntarily pleaded guilty, resulting in a lighter punishment. Dong Mou Company was fined RMB 400 million, Yao Moumou was sentenced to 14 years in prison and fined RMB 50 million, and all illegal gains were recovered. The second-instance court upheld the judgment.  

(2) Case Analysis  

China’s export rebate policy for silver and its products has undergone significant adjustments. After the cancellation of silver export rebates in 2008, the policy allowed silver products that underwent substantial processing to apply for rebates. To prevent fraud through simple processing, Document No. 39 of 2012 established a "main raw material cost proportion" standard, treating products with silver costs exceeding 80% as equivalent to silver. Subsequently, Document No. 98 of 2014 further expanded the scope of supervision for precious metal raw materials. However, cases of evading supervision by precisely configuring raw material ratios continued to emerge. Judicial authorities have gradually developed a set of criteria for identifying such cases:  

1. Analysis of product function and market demand.  

Judicial authorities examine the actual function and market demand of products to determine the authenticity of export activities. In some cases, defendants argued that related products had obtained patents, but the court pointed out that the "sputtering target assemblies" were merely silver fixed simply to backplanes, without quality inspection or functional testing, completely failing to meet product quality standards, and the production purpose was not to achieve the claimed function. Similarly, in the Zhejiang High Court case (2018) Zhe Xing Zhong No. 97, the court found that so-called "palladium-connected silver wires" neither met industrial standards nor satisfied high-end audio demands, lacking a genuine market basis.  

2. Review of the rationality of transaction processes.  

Judicial authorities focus on whether the setup of transaction links aligns with business logic. In this case, the court found that Dong Mou Company, despite directly agreeing on the silver price with the end buyer, still inserted its controlled affiliated companies to complete formal resale transactions, clearly violating normal trade practices and reflecting an intent to conceal the transaction’s substance. In the Shantou Yang Mou tax fraud case, establishing multiple layers of domestic and foreign affiliated companies for circular transactions was also recognized as key evidence of fabricating transaction links.  

3. Tracking settlement methods and final goods flow.  

Genuine settlement methods and the final use of goods are key indicators for judging the substance of transactions. In this case, the parties settled solely based on the silver value, and the "sputtering target assemblies" were immediately disassembled and smelted overseas, fully proving that the transaction’s subject was essentially silver, not silver products. This characteristic is commonly used as crucial evidence for identifying tax fraud in similar cases.  

This case established important adjudication rules for handling misdeclared product name tax fraud cases: formal compliance cannot mask substantive illegality. Enterprises engaged in exporting precious metal products should ensure that products have genuine functions and market demand, and that transaction processes align with business substance, avoiding technical arrangements to circumvent policy supervision. At the same time, it should be noted that whether declaring non-rebate-eligible products as rebate-eligible constitutes tax fraud requires specific analysis of subjective intent. If a company’s declaration error stems from misunderstanding rather than intentional false declaration, it does not necessarily constitute tax fraud.  

IV. Trend Outlook: Export Tax Rebates Remain a Key Supervision Area for Judicial and Tax Authorities  

With technological advancement and deepened international collaboration, the export tax rebate supervision system is rapidly upgrading. Looking ahead to 2026, regulatory efforts will show three clear trends:  

(1) Transition from "Invoice-Based Tax Control" to "Data-Driven Tax Governance," with Customs and Tax Supervision Data Interconnection  

The comprehensive rollout of the Golden Tax Phase IV system marks the official entry of tax supervision into the era of "data-driven tax governance." The most significant change is the comprehensive sharing of information across departments—data barriers between tax, customs, banking, foreign exchange, public security, and other departments will be broken. The system will automatically analyze the goods flow, fund flow, and invoice flow of enterprises’ export businesses, intelligently identifying anomalies. For instance, frequent cross-border movement of the same batch of goods, export prices significantly deviating from market levels, or mismatches between declaration documents and invoice information will immediately trigger warnings.  

Supervision methods will also shift from post-event punishment to pre-emptive prevention. If the system detects suspicious transactions, it may directly suspend rebate processing at the declaration stage, requiring enterprises to provide proof materials first. This shift will enhance the precision and deterrence of supervision.  

(2) Focus on Emerging Industries and Specific Goods  

Policy-supported industries often become hotbeds for tax fraud. As the state increases support for emerging industries like the "new three" (lithium batteries, photovoltaic products, new energy vehicles), the risk of export tax fraud in these sectors is also rising. In August this year, Shenzhen investigated the first export tax fraud case in the "new three" sector, involving RMB 149 million. Regulators are expected to establish specialized monitoring indicators to analyze the alignment between these industries’ technical characteristics, raw material procurement, production capacity, and export scale, preventing abuse of tax incentives.  

Simultaneously, high-value, easily misdeclared goods such as precious metals (silver, gold products), rare metals, and high-end electronic products will continue to face strict supervision. Classification reviews and price verification for these goods will become more meticulous.  

(3) Dual Strengthening of International Collaboration and Corporate Internal Controls  

International trade compliance is becoming a globally shared focus. Countries are deepening cooperation in anti-tax avoidance and anti-money laundering, enhancing information exchange and law enforcement collaboration through bilateral and multilateral agreements. For example, Mexico’s customs reform, set to take effect in 2026, focuses on rigorously combating smuggling and tax evasion through digital means, indicating a comprehensive increase in transparency requirements for cross-border trade. For enterprises, compliance management must shift from "remedial" to "preventive," establishing effective internal control systems that integrate compliance requirements into every step—procurement, production, and export—to avoid significant economic losses and exposure to tax-related administrative and criminal risks.