Editor's Note: The book "Explanation of Provisions of the Criminal Law of the People's Republic of China, Legislative Rationale and Relevant Provisions" prepared by the Criminal Law Office of the Legislative Affairs Commission of the Standing Committee of the National People's Congress (NPCSC) provides authoritative explanations of the crime of illegally selling special invoices for value-added tax (VAT), and reveals that the object of this crime can only be the blank VAT invoices. The current practice of some judicial organs of replacing the crime of false invoicing with the crime of illegal sale of VAT invoices is contrary to the basic principle of the law of criminal punishment and the legislative intent, and the author calls upon the judicial circles to stop the improper expansion of the application of this crime as soon as possible.

01 Explanation of the Provisions of the Legal Affairs Commission of the National People's Congress on the Crime of Illegal Sale of Special VAT Invoices

In June 2009, the Criminal Law Office of the Legislative Affairs Commission of the Standing Committee of the National People's Congress (NPCSC) and Peking University Press published the "Explanation of Provisions of the Criminal Law of the People's Republic of China, Reasons for the Legislation, and Relevant Provisions", which elaborated on the "Explanation of Provisions" for the crime of illegal sale of VAT invoices as follows, and the author analyzes the important contents of the book by selecting them in four points. The author selects the important contents and analyzes them in four points.

(i) The crime is a crime of commission, and the legal interest infringed upon is the franchise to issue invoices, which has nothing to do with the loss of tax revenue

"The crime of illegally selling special value-added tax invoices as stipulated in this article refers to the act of selling invoices by holders of special value-added tax invoices in violation of the law, except for special value-added tax invoices issued by the tax authorities in accordance with the regulations. According to this article, as long as the above acts are committed, it constitutes the crime of illegally selling special value-added tax invoices."

The first sentence of the Legal Affairs Commission of the National People's Congress states clearly that the legal interest infringed upon by this crime is the tax authorities' monopoly on the sale of invoices, with emphasis on the word "sale". That is to say, the legislator does not allow the actor to replace the tax authorities to sell invoices, and the sale of invoices to disturb the franchise is defined as an illegal sale of crime. This means that in judicial practice, the judicial authorities accuse the perpetrator of an invoice selling behavior constitutes the crime of illegal selling on the premise that the behavior infringes on the invoice selling franchise of the tax authorities. In other words, if the act of issuing invoices to earn invoicing fees does not infringe on the exclusive right of the tax authority to issue invoices, but merely disrupts the general order of invoice management, it does not have the elements of the law of this crime.

The second sentence indicates that the crime is a behavioral crime, i.e., the crime requires only the completion of the "act of unlawful sale" and not the resultant element of loss of tax.

(ii) The subject of this crime includes the staff of the tax authorities, and the object of the crime can only be a blank invoice.

"The 'illegal sale' stipulated in this article is broadly defined to include both the acts of tax authorities and their staff members who intentionally violate the provisions of laws and regulations to conduct the sale, as well as the acts of any other person who illegally sells special VAT invoices."

The third sentence of the NPC LAC's clarification points out that the subject of this crime can be a staff member of the tax authority. How do staff members of tax authorities illegally sell VAT invoices? Obviously, it is not accomplished through the acts implemented by enterprises such as issuing invoices, filling out invoices and using invoices. In the 1990s, the State Administration of Taxation disclosed several major cases of illegal sale of invoices by the staff of tax authorities, and the main behavior of these cases was that the staff of tax authorities colluded with the outsiders, took advantage of the management authority of managing the blank invoices and invalid invoices, and obtained the blank VAT invoices and sold them to the outsiders for profit through the means of forging the handwriting, impostor and other fraudulent and fraudulent means. (b) To obtain blank VAT invoices and sell them externally for profit.

It can be seen that the object of the crime committed by the staff of the tax authority must be the blank VAT invoices, which are usually in the form of costs and sets. Since the staff of the tax authorities can commit this crime, it means that the object of this crime must be the blank VAT invoices, but not the VAT invoices that have been issued or used. From this point alone, it can be seen that it is obviously wrong for the judicial organs in some places to characterize the behavior of some enterprises in issuing invoices to earn invoicing fees as the crime of illegal sale.

(iii) The general public commits this crime by selling blank invoices as merchandise.

"The illegal sale of special VAT invoices is, first and foremost, conditional on the possession of such invoices, which they obtain, either from legal channels, i.e., special VAT invoices received from the tax authorities in accordance with the law by units and individuals meeting the conditions for general taxpayers. Some of them are VAT invoices obtained illegally by colluding with tax officials. However, regardless of whether the source of the illegally sold VAT invoices is legal or not, it does not affect the establishment of this crime." This is the fourth sentence of the NPC LAC's clarification, which we read together with the third sentence.

The third sentence of the NPCSC speaks of the fact that any person other than the staff of the tax authorities can commit this crime. The fourth sentence is explaining why other persons who are not staff members of the tax authorities can commit this crime, or the source of the invoices used to commit this crime. That is to say, if general personnel want to commit this crime, they have to possess invoices in the first place, so how can they possess invoices? The legislator is of the view that ordinary persons can obtain and hold invoices through legal means, or they can collude with tax officials to obtain and hold invoices, and only by holding invoices can they sell them illegally to the outside world.

From the description of the two possible ways in which invoices can be held by ordinary persons by the NPCSC, it is clear that these invoices point to blank invoices. Here, we focus on analyzing the second situation, that is, the situation in which an ordinary person illegally obtains invoices through collusion with the tax authorities. In this case, it can be seen that the invoices illegally obtained by the perpetrator from the staff of the tax authorities must be blank invoices, then the perpetrator can have two choices, one is to fill in the invoices and use them for profit, and the other is to sell these blank invoices directly to the public as commodities. Obviously, the criminal act pointed to by this crime is the latter, not the former, and if it is the former, then the behavior of the perpetrator should be qualified and punished in accordance with the competing crimes of illegally purchasing VAT invoices and falsely issuing VAT invoices. Therefore, we can conclude that the object of the crime of illegal sale of invoices by general personnel as elaborated by the Legal Affairs Commission of the National People's Congress is the blank invoice, which does not involve the act of filling in.

Next, we analyze the behavior of general personnel who obtain invoices through legal channels and sell them illegally. Through the above analysis, we can conclude that the general personnel illegal sale of invoices should be the object of blank invoices. General personnel through legal channels to obtain invoices illegally sold or blank invoices? The author believes that the answer is yes. This kind of behavior is feasible in the special historical background in the past, and it is more often than not. The reason is that, after the enterprises purchased the invoices from the tax authorities, due to the insufficient function of the tax system's invoice audit and comparison, it is difficult to construct the association between the blank invoices and the purchasers, then the purchasers can legally receive the blank invoices and then sell the blank invoices across the regions and industries, which is difficult for the tax authorities to find out in time. In the following, I will introduce a typical case to be analyzed.

(iv) Theft, fraudulent taking of invoices and then illegal sale of invoices, the object of the crime is inevitably blank invoices

"In judicial practice, the question arises as to how to characterize the act of stealing or fraudulently obtaining special VAT invoices and then illegally selling them. In terms of the legislative intent, there is no special restriction on the source of the illegally sold VAT invoices to constitute the crime of illegal sale of VAT invoices, regardless of whether it is legal or illegal. Meanwhile, according to Article 210 (1) and (2) of the Criminal Law, theft and fraudulent acquisition of VAT invoices shall be penalized by conviction for theft and fraud respectively. However, the criminal law does not specify how to criminalize and punish the act of stealing or fraudulently taking VAT invoices and then selling them illegally. In the theory of criminal law, these two behaviors should be implicated and should be punished from a felony."

The content of this note from the NPCSC can also bring some useful insights. First of all, the legislator believes that invoices can be used as objects of theft and fraud, which means that invoices have property value. Secondly, the legislator believes that in objective practice, there are criminal activities in which the perpetrator steals invoices and then illegally sells them to the outside world. Imagine, if an invoice is an enterprise has issued invoices, has filled out the specific content of the invoice, then the perpetrator after the theft of this invoice can be sold for profit? The answer is obviously no. In other words, here is stolen or fraud can be used for illegal sale of invoices must be blank invoices, then its property value can be pointed to the unspecified subject. And the perpetrator of theft and fraud is impossible to steal, fraudulent invoices normally fill in the use of normal external issuance, therefore, theft, fraud and then illegally sell the behavior must be the sale of blank invoices. Therefore, from the rules of this crime can also be inferred from the object of this crime can only be blank invoices.

In summary, we can clearly draw the following conclusions by analyzing the description of the provisions of the NPC LAC on the crime of illegal sale of VAT invoices:

1.The legal interest infringed by the crime of illegal sale of VAT invoices is the State's monopoly on the issuance and sale of invoices, independent of whether or not it results in a loss of tax revenue;

2.The subjects of this crime include the staff of the tax authorities and other persons in possession of blank invoices, regardless of whether the reasons for holding the invoices are legal or not;

3.The criminal act of this crime is to sell blank invoices as commodities to unspecified objects, and the object of the crime refers to blank invoices only.

02 The Legislative Affairs Commission of the National People's Congress Explains the Legislative Reasons for the Crime of Illegal Sale of Special VAT Invoices

The "legislative grounds" for the crime of illegal sale of VAT special invoices as elaborated by the Legal Affairs Commission of the National People's Congress are as follows, which the author will analyze together.

(i) The legal interest protected by the crime is the State's monopoly on the sale of invoices.

"Special VAT invoices are issued by the State tax authorities in accordance with the regulations and are restricted to general VAT taxpayers. Beyond that, no one and no organization may sell them, and special VAT invoices must be very strictly managed." The first sentence of the NPC Law Commission's articulated legislative rationale further clearly reveals that the core legal interest protected by this crime is the state's monopoly on the sale of special VAT invoices. The legislator, by granting the tax authorities the exclusive right to issue invoices, builds up a national monopoly system for the flow of invoices and ensures the lawful and orderly circulation of invoices from the source.

(ii) The crime has fulfilled its historic mission and should be put to sleep.

"Illegal sale of VAT invoices not only undermines the state's management of VAT invoices, but also contributes to the criminal activity of fraudulently issuing and cheating state taxes. It should be firmly cracked down on." The second sentence in the NPC's Legal Affairs Committee's elaboration of the reasons for the legislation emphasizes the thinking that the crime should be severely cracked down on in the historical context of his time. However, nowadays, the anti-counterfeit tax-control system has been put in place, and the invoices purchased by enterprises from the tax authorities are all bound with the purchasing enterprises, so there is no market for the sale of blank invoices, and the crime of illegally selling VAT invoices should become a dormant crime, and its final destination should be "the end of the road". In addition, the criminal activity of false invoicing is no longer fueled by the illegal sale of special invoices, but by tax-related criminal acts that show new features such as scale, chain, and professionalization, such as violent false invoicing by shell companies with new changes.

(iii) Early typical cases confirming that blank invoices are the object of illegal sales of invoices by the average person

By searching the earliest case of the crime of illegal sale of VAT invoices currently made public on the China Judicial Instruments Network, the author now introduces a typical case - the crime of illegal sale of VAT invoices by Zhou Mou, Fang Mou, etc. The case is as follows: In April 2011, Defendant Zhou Mou, after conspiring with Song Mou, decided that Defendant Zhou Mou would advance funds, and Song Mou would be responsible for In April 2011, after conspiring with Zhou Mou, he decided that Defendant Zhou would advance funds, Song Mou would be responsible for purchasing a limited company with the qualification of general taxpayer and use it to fraudulently obtain VAT invoices from the state tax department, and Defendant Zhou Mou would contact the invoices and process them for illegal profits. in late April 2011, Song Mou and Fang Mou published advertisements in the city's newspapers seeking to purchase a company with the qualification of general taxpayer. Afterwards, Song Mou appeared with the boss of Anxin to discuss the acquisition of the company, and then with Defendant Zhou Mou sent Wang Mou together, and the boss of Anxin to negotiate a deal, and from Anxin to obtain the installation of the Golden Tax Card System computer mainframe, IC card, invoice purchase and collection of the book and other things. Afterwards, Song Mou appeared in the name of the company to purchase 100 VAT invoices from the State Administration of Taxation (SAT). Afterwards, Zhou Mou arranged to transport the computer mainframe, IC card and blank VAT invoices fraudulently purchased with the Golden Tax Card System to Shenzhen by air consignment for others to handle.

It can be seen that Zhou Mou and Fang Mou in this case, after purchasing a limited company with the qualification of a general taxpayer, obtained blank VAT invoices from the tax authorities through lawful means and sold the blank invoices together with the computer mainframe and IC card installed with the Golden Tax Card System to make unlawful profits. The case confirms the argumentation that the object of illegal sale of invoices by general personnel should be the blank invoices rather than the filled-in invoices. Therefore, in judicial practice, the improperly expanded application of invoices that have been filled in with information as the object of this crime is clearly a departure from the legislative purpose and constituent elements of the crime.

03 Conclusion

The introduction of tax-related judicial interpretations by the Supreme Court and the Supreme Procuratorate has triggered heated discussions among all sectors of the community on crimes and non-crimes, and this crime and that crime. We are concerned that the Shanghai Chongming District People's Procuratorate convened the staff of tax, public security, procuratorate, court and other substantive organs to focus on the "new issues of false VAT invoices and false invoicing" to carry out a seminar at the end of last month. It can be said that this is a good thing, but also cause concern. "It is good that the practical sector expects to gather consensus through the seminar in order to further unify the concept of law enforcement and standardize the judicial application standards; and it is worrying that the application of the crime of illegal sale of VAT invoices, as stated by the participants in the seminar, is a departure from the specific historical background, legislative purpose and interpretation of the crime. The "concern" is that the application of the crime of illegal sale of VAT invoices, as stated by the participants in the seminar, is an interpretation that is divorced from the specific historical background and legislative purpose of the crime, which is of no reference significance and value.

At a time when tax governance is fully digitalized, this crime has lost its basis for survival and should be put to bed as a dormant crime. For false invoicing behavior that does not have the purpose of tax fraud and does not cause tax loss, the crime of false invoicing, one of the crimes in Article 205 of the Criminal Law, shall be applied. The criminal object of the crime of false invoicing includes VAT invoices, and the maximum penalty is seven years' imprisonment, which can effectively avoid the problem of disproportionately heavy penalties of life imprisonment for false invoicing that does not have the purpose of tax fraud and does not result in tax loss.