Affiliated transactions are common transactions between group companies, and business transactions such as equity transfer, capital lending and borrowing, and purchase and sale of goods or services between affiliated enterprises are relatively common. At present, China's legislation on anti-avoidance procedures between related enterprises is mainly based on the field of cross-border related transactions, and has already formed a more professional and complete methodology as well as handling procedures, but how to investigate and adjust related transactions of domestic enterprises has not yet been formed into clear provisions. In practice, there are certain disputes on whether the special tax adjustment procedures can be applied to domestic connected transactions, and there are different views on whether the transactions between connected entities with the same effective tax burden in China can not be adjusted. Based on the recent case of a listed company's subsidiaries being adjusted to pay back tax, the author analyzes the common controversial issues of domestic connected transactions and puts forward risk prevention suggestions.

It is a common structural arrangement for most enterprises to implement equity incentive to build a shareholding platform through partnerships, limited liability companies and other organizational forms. The shareholding platform has great advantages in controlling the number of direct shareholders, ensuring the founder's control rights and improving the convenience of changes in equity. In addition, in the past, some places adopted the approved levy policy for shareholding platforms, which greatly reduced the tax burden compared with direct shareholding. However, in recent years, there have been cases of tax evasion by using the approved collection policy to split income and transfer profits. The "tax depression" formed based on the approved collection policy has also been controversial because of its lack of legal basis, undermining fair competition in the market and leading to competition for tax sources. In 2021, in the interpretation of Opinions on Further Deepening the Reform of Tax Collection and Management, State Taxation Administration of The People's Republic of China Inspection Bureau pointed out that the use of "tax depressions" to evade taxes was one of the key areas to be cracked down. At the end of 2021, the Announcement on the Collection and Management of Personal Income Tax from Equity Investment Management made it clear that all equity investment partnerships are subject to audit and collection, and recently, auditing and taxation departments have also clearly put forward the "small policy" to clean up the irregularities in attracting investment. Based on the aforementioned collection and management situation, the application space of the approved collection policy has been tightened, and the tax burden advantage of building a shareholding platform through partnerships and limited liability companies is no longer available. Therefore, in recent years, there have been many transactions that cancel the shareholding platform and change to direct shareholding. In the cancellation of shareholding platforms such as partnerships or limited liability companies, many issues such as whether the non-trading transfer of shares requires tax, and the joint liability of shareholders when the cancelled enterprises owe taxes have caused heated discussions. Based on two cases of dismantling the shareholding platform, this paper analyzes the tax liability and tax-related risks of non-transaction transfer for readers' reference.

The State Administration of Taxation (SAT) proposed on April 9 at the "Symposium for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in" that "reverse invoicing" for resource recovery enterprises should be realized by the end of April, and stated: "Further smooth the VAT ded uction chain through the implementation of "reverse invoicing", and give resource recycling enterprises standardized and legal pre-tax deduction vouchers for enterprise income tax ". If the news of the above-mentioned symposium is accurate, will the reverse invoicing of renewable resources have the dual functions of VAT deduction and pre-tax deduction, thus realizing a similar system design as the current purchase invoices for agricultural products?

On 15 March 2024, the Supreme People's Court (SPC) and the Supreme People's Procuratorate (SPP) issued the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Tax Collection and Administration (Fa Shi [2024] No. 4). Surprisingly, the two high court judicial interpretations have made a major breakthrough in criminal compliance policy, completely dispelling the concern of whether the court system can and should apply criminal compliance in the field of tax-related crimes, and the importance of criminal compliance will be greatly enhanced. At the same time, the legal effect of applying criminal compliance to tax-related crimes is still in doubt, pending further improvement of the legislation. This paper will analyse the future application of criminal compliance in tax-related crimes in conjunction with the judicial interpretations of the two high courts, and put forward sugg

The Interpretation of the Supreme People's Court of the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering the Administration of Tax Revenue (Legal Interpretation [2024] No. 4, hereinafter referred to as the Judicial Interpretation of 2024), which was formally implemented on March 20, has made major modifications to the behavioral elements and sentencing standards for tax-related crimes, especially the crime of obtaining export tax refunds fraudulently. Compared with the previous judicial interpretations and judicial practice, the new judicial interpretation has added tax fraudulent means such as "fraudulent use of other people's goods for export" and "circular export", and deleted the controversial provision of "four self and three missing". Generally speaking, the new judicial interpretation has made the regulations for export enterprises more strict and the crackdown on tax fraud more vigorous, which has led to a sharp increase in the criminal risk of export enterprises, but it has also made it clear that the path of compliance for entity enterprises is lenient, and the majority of export enterprises, especially foreign trade enterprises, should pay great attention to it.

On March 18, 2024, the Supreme People's Court and the Supreme People's Procuratorate announced the "Judicial Interpretation on Handling Criminal Cases Endangering Tax Collection and Management and Related Legal Issues." This interpretation made significant adjustments and modifications to the application rules of tax evasion offenses. The interpretations seamlessly integrate with the provisions of the Criminal Law regarding tax evasion, resolving the long-standing mismatch between judicial interpretations and criminal law provisions, and advancing to broaden the scope and targets of combating tax evasion. The interpretation adjusts the sentencing benchmarks for tax evasion offenses, clarifies the rule of pursuing criminal responsibility after administrative actions, raises the threshold for the criminalization of withholding obligors, highlighting a policy of balancing severity and leniency in criminal matters. While providing specific and clear guidelines for judicial practices concerning tax evasion offenses, certain updates in the interpretation, such as the denominator clause for taxable amounts, leave doubts, potentially increasing the criminal liability risks for taxpayers. This article will interpret in detail the provisions of tax evasion offenses in the judicial interpretations of the Supreme People's Court and the Supreme People's Procuratorate, analyze the legal application of tax evasion offenses, aiming to provide references for enterprises to prevent and respond to criminal risks related to tax evasion.

Under the influence of various economic factors both at home and abroad, some enterprises have defaulted on tax payment due to broken capital chain and tax non-compliance in the course of past operations. Many enterprises are struggling to maintain their business in the state of long-term tax arrears, and even the unlawful phenomenon of evading the recovery of tax arrears.2024 The Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Hazardous Tax Collection and Management promulgated by the Supreme People's Court and the Supreme People's Procuratorate on March 18th filled in the performance of criminal acts of China's criminal law on the crime of evading the recovery of tax arrears and activated the crime that has long been dormant, and the enterprises in tax arrears are afraid of facing severe criminal liability risks. are afraid of facing serious criminal liability risks. This paper takes the interpretation of the provisions of the Judicial Interpretation of the crime as an entry point, and analyzes the boundaries between law and lawlessness, crime and non-crime of tax-default enterprises in combination with cases, with a view to providing reference for the enterprises to prevent and cope with criminal risks.

Recently, a staff member of a flexible labor platform was found by the court to have committed the crimes of false VAT invoicing and false invoicing and was held criminally liable for accepting the instructions and arrangements of the platform and being responsible for docking with downstream companies and enterprises with invoicing needs to facilitate the business of false invoicing. With the development of flexible labor business in recent years, the urgency of tax compliance has become increasingly prominent. In practice, flexible labor platforms are often used as a tool for enterprises to make false invoices and evade taxes, with increasing risks. In view of this, this article takes this case as a guide and discusses issues such as insufficient inputs and common risky business of flexible labor platform for the benefit of readers.