In 2024, with the gradual release of new production capacity, China's coal production maintained growth and further concentrated in Jinshan, Shanxi-Menggui and Xinjiang regions, with consumption accounting for more than 50% of the primary energy consumption structure, and the coal industry still occupies an important strategic position in the national economy. At the same time, due to the lack of invoices at the source, excessive tax burden and other problems, the coal industry is also a high incidence of false invoicing, tax evasion administrative and criminal cases.

Since 2024, the importance of tax compliance has become more and more prominent as tax risks in the coal industry have surged against the backdrop of a joint standing crackdown by eight departments on tax-related crimes and the strict investigation of non-compliance with fiscal incentive policies. At the press conference of the Interpretation of the Supreme People's Court of the Supreme People's Procuratorate on Several Issues Concerning the Application of Law to the Handling of Criminal Cases of Endangering Tax Collection and Administration (Fa Shi [2024] No. 4), Yu Shuangbiao, Deputy Director of the Legal Policy Research Office of the Supreme People's Procuratorate, pointed out that coal and other industries are still the high incidence of crimes of false and fraudulent taxation. Due to the existence of coal mining quota system, coal mining enterprises usually adopt off-the-books operation and other ways to sell coal mined in excess of the quota, and it is difficult for downstream coal trading enterprises to obtain VAT invoices as the proof of VAT input deduction and pre-cost of enterprise income tax when purchasing coal from them. In addition, since the National Development and Reform Commission (“NDRC”) issued the Opinions on Accelerating the Merger and Reorganization of Coal Mining Enterprises in 2010 to start the work of resolving excess capacity in the coal industry, the coal industry has turned into a seller's market, and the coal trading enterprises are limited in the amount of coal within the quota that can be purchased from large-scale regular mines, and in order to satisfy the needs of the downstream enterprises, the coal trading enterprises can only purchase the over-mined coal from small-scale mines, which has intensified the invoicing problems faced by the coal industry. This change has exacerbated the invoice dilemma faced by the coal industry. In order to solve the problem of insufficient input invoice deduction, some coal enterprises reconstructed their business model and utilized the methods of dependency and proxy invoicing to obtain input invoices, but due to the diversity and complexity of the modes and differences in the understanding of the business model by tax enterprises, there is a greater risk of false invoicing. In addition to the problem of false invoicing, in recent years, the coal industry has been exposed to a number of cases of resource tax evasion in the mining process, consumption tax evasion in the processing process and income tax evasion in the process of equity change, and the tax risk of the coal industry is characterized by multiple links and multiple taxes.

Based on this, in order to enable the majority of coal industry enterprises to carry out tax management in compliance and legality, strengthen internal risk prevention and control and external risk isolation, and effectively cope with and resolve tax-related legal risks in their future operation, Huatax wrote this report based on its in-depth observation of the coal industry as well as its experience of acting as an agent in tax-related cases for coal enterprises, and deeply analyzed the tax environment of the coal industry under the new situation of tax levy and management, and summarized the latest 2024 The report analyzes the tax environment of the coal industry under the new situation of tax collection and management, summarizes the latest tax-related criminal and administrative cases of coal enterprises in 2024, reveals the status quo and the latest changes of the tax-related risks in the coal industry, and puts forward suggestions for compliance of enterprise management on this basis, with a view to providing references to coal enterprises in preventing and controlling the tax-related legal risks.

Click to download:《Coal Industry Tax Compliance Report》(2025)