Foreign Trade Industry Tax Compliance Report（2024）

Export tax rebate refers to a tax system in which the State refunds to export enterprises the import tax on raw materials for exported goods, as well as indirect taxes such as value-added tax (VAT) and consumption tax, which have been paid at various stages of domestic production and circulation, so that exported goods can enter the international market at a price that does not include indirect taxes and participate in international competition. In recent years, the country's export tax refund processing time has been speeding up and efficiency has been accelerated, coupled with the successive implementation of customs paperless clearance, reform of the foreign exchange underwriting system, and facilitation services for RMB settlement of cross-border trade, which have played an important supportive role for export enterprises in generating foreign exchange.
In 2023, China's foreign trade continued to run smoothly. As of the date of the report, the General Administration of Customs released data showing that the total value of China's imports and exports in the first 11 months of 2023 amounted to RMB 37.96 trillion, unchanged from the same period last year. However, along with the steady and continuous development of foreign trade exports, illegal and criminal behaviors such as tax fraud and false invoicing have emerged one after another, impacting the orderly development of China's foreign trade business. In order to protect the orderly development of foreign trade industry and regulate the order of export tax rebates, the state has continued to crack down on illegal and criminal behaviors such as fraudulent export tax rebates with high pressure, and to curb the illegal and criminal behaviors of tax cheating and false invoicing in the foreign trade industry. In addition, under the concept of "who exports, who collects foreign exchange, who refunds tax, who is responsible", the export enterprise bears most of the tax risk, the light is due to the non-compliance of the documents can not be refunded, the heavy is involved in the case of fraudulent invoicing, tax fraud. Therefore, export enterprises need to strengthen tax compliance in 2024.
Based on the in-depth observation of the foreign trade industry and the profound summarization of the experience of representing foreign trade enterprises in tax-related cases in recent years, HUASHUI team has prepared this "Foreign Trade Industry Tax Compliance Report (2024)". This report summarizes the five common types of tax-related risks in the foreign trade industry, the four major areas of high incidence, analyzes the six major causes of tax-related risks by observing the dynamics of tax regulation in the foreign trade industry and the data of tax-related cases, and captures the typical administrative and criminal cases of export tax refunds for in-depth analysis, and puts forward the key points of administrative remedies and criminal defense strategies on the basis of the foregoing in a targeted manner, in order to provide suggestions for the tax compliance in the foreign trade industry, and to make contributions to the sustainable and healthy development of the foreign trade industry. This report is divided into nine sections.
This report is divided into nine sections, and the full text is about 35,000 words.

Jan. 5, 2024, 1:56 p.m.

3508Views

Petrochemical Industry Tax Compliance Report (2024)

In recent years, with the severe investigation and punishment of invoice changing cases in the petrochemical industry, the traditional means of invoicing and the new type of invoicing methods derived from the on-line invoicing module of refined oil products are difficult to play a role, and the phenomenon of evasion of consumption tax through invoicing has gradually faded away. No. 11 of 2023), which included a large number of chemical products into the scope of collection of refined oil products, making the chemical products consumption tax controversy of the special remediation work on refined oil products since August 2022 settle down, while some chemical products manufacturers still have the legacy consumption tax risk. In addition, since 2023, another major feature of the petrochemical industry tax collection and management is the special audit of gas stations and the investigation and handling of new business models in the field of refined oil products circulation, which can be seen from the various typical cases that have broken out this year, the petrochemical industry has shown a wave of unsettled and a wave of "strict investigation and hard hitting" a consistent regulatory posture.
The "Petrochemical Industry Tax Compliance Report (2024)" is a legal research report compiled based on Hwuason's in-depth observation of the petrochemical industry and the profound summarization of its experience in representing petrochemical industry in tax-related criminal and administrative cases, aiming at revealing the current situation of the petrochemical industry in the handling of tax-related criminal and administrative cases and the trend in the judicial investigation and handling, analyzing the risky business model of the petrochemical industry and its evolution, and proposing defense strategies and compliance recommendations, so as to help petrochemical enterprises to prevent and protect themselves from tax-related criminal and administrative cases. The report also proposes defense strategies and compliance recommendations, with a view to providing reference for petrochemical enterprises in preventing and weakening tax risks.

Jan. 2, 2024, 4:03 p.m.

2154Views

Real Estate Industry Tax Compliance Report (2023)

Since the beginning of 2018, tax authorities across the country have begun large-scale bidding and procurement of land value-added tax clearing and auditing services from third-party intermediaries. In Beijing, for example, before 2018, the government centralized the procurement of land VAT clearing and auditing services for 19 projects, and in the first three quarters from 2018 to 2022, the number was 667. The surge in the number of government procurement of land value-added tax clearing and auditing services reflects three aspects: first, in recent years, a large number of real estate projects across the country have reached the conditions for clearing and are required to make land value-added tax clearing, ushering in a batch of centralized clearing after the merger of state and land taxes; second, the land value-added tax tax burden cost of active clearing is abnormally high due to the mismanagement by many real estate enterprises of the fiscal management of their projects prior to the clearing of the land value-added tax liability. This has, to a certain extent, resulted in the low motivation of real estate enterprises to take the initiative to liquidate; and thirdly, due to the impact of the economic downtrend, the local governments objectively have the demand to accelerate the land value-added tax liquidation. Against this background, real estate enterprises faced severe land VAT risks.
The Land Value-Added Tax Compliance Report for Real Estate Industry (2023) is a legal research report compiled based on Hua Shui's in-depth observation of the real estate industry and profound summarization of its experience in representing land value-added tax cases in the real estate industry, aiming to reveal the current situation of land value-added tax cases in the real estate industry and the trend of investigation and handling, analyze the risk of land value-added tax in the real estate industry, and put forward professional strategies for tax-related dispute resolution and compliance recommendations, with a view to providing real estate enterprises with preventive measures against land value-added tax.

Nov. 22, 2023, 4:53 p.m.

1166Views

High Net Worth Individual Tax Compliance Report (2023)

Along with China's economic development, the number of high net worth individuals in Mainland China continues to grow. According to the Hurun Report on HNWIs 2022, "HNWIs" are defined as those with disposable assets of more than $6 million. Among them, "disposable assets" include deposits, insurance, stocks, debts, investment trusts and other financial commodities, precious metals, etc. held by the entire household, but not including real estate currently residing. According to statistics, by 2020, there will be 805,350 "high net worth households" with disposable assets of RMB10 million to RMB100 million. With the rapid growth in the number of HNWIs in Mainland China, there is an increasing demand for tax planning to save tax. At the same time, tax authorities around the world have tightened their control over individual income tax, and HNWIs have become an area of continuous attention and focus of tax supervision and investigation. In practice, there are numerous cases in which HNWIs are recognized as tax evaders or have their taxes adjusted. This report is compiled by China Tax based on the analysis and research of tax administration policies for HNWIs, combined with the typical tax-related cases of HNWIs in which China Tax has participated in recent years, with the aim to base on the characteristics of tax administration of HNWIs, reveal the major tax risk points of HNWIs both inside and outside the country, and put forward the targeted and feasible compliance suggestions on the basis of which, in order to provide guidance and reference for HNWIs in terms of tax compliance.

Nov. 22, 2023, 5:49 p.m.

1369Views

Internet Platform Tax Compliance Report (2023)

In 2022, driven by Internet technology and supported by national policies, Internet platforms show a more vigorous development trend. Meanwhile, due to the slowdown in the growth rate of consumer demand, the investment and operation business of platform enterprises showed a pace of tilting towards the production field. For example, the flexible labor platform opens up the information barriers between employing units and talent resources, activating and releasing talent vitality; the Internet tax agency platform reduces the tax compliance costs of real enterprises and empowers small and medium-sized enterprises. Relying on information technology, the platform economy is able to improve the resource allocation efficiency of the whole society, fully drive employment, and solve many difficulties and pain points of real enterprises in the operation process, which is deeply concerned by the national policy.
On December 26, 2022, the Central Economic Work Conference explicitly proposed "to vigorously develop the digital economy, improve the level of normalized supervision, and support platform enterprises to make a big difference in leading development, creating employment, and international competition." With the advancement of technology and the further development of the platform economy, the ability of the platform to help industry will be higher, promoting the informationization, technologization and digitalization of traditional industries, and the platform economy is increasingly becoming a new driving force for economic growth. However, the Internet platform is still in the period of rapid development, the national policy is still in the process of further follow-up, and the tax regulation is still imperfect; some platform enterprises are oriented to business and profit, ignoring the tax compliance construction of enterprises, and there are loopholes and deficiencies in the business model; there are unscrupulous elements who take advantage of the insufficiency of regulation and platform enterprises, and intentionally implement illegal and criminal behaviors such as tax cheating and false invoicing, which results in part of the platform enterprise

Nov. 22, 2023, 6:06 p.m.

1562Views

Coal Industry Tax Compliance Report (2023)

Coal occupies a dominant position in primary energy production and consumption, and is the pillar of China's traditional industry and an important support for the development of the national economy. In recent years, the tax-related problems in the operation of coal enterprises have become more and more prominent, and triggered the risk of administrative and criminal liability, which not only led to the enterprise into the operation of the situation, but also put a number of entrepreneurs behind bars.
February 28, 2020, Inner Mongolia to carry out special rectification of the coal field of 20 years of action, followed by a number of other provinces, including Shanxi, Yunnan, Sichuan, Xinjiang and other provinces also launched the coal field of self-correction. Multi-departmental coordination has led to the investigation and prosecution of a number of cases of tax violations by coal enterprises, which has led to further fermentation of tax-related and criminal risks of coal enterprises.
In March 2021, the Central and State Offices of the People's Republic of China issued the Opinions on Further Deepening the Reform of Taxation Levy and Administration, which explicitly treats coal and other industries as a key area of concern, and severely cracks down on illegal and criminal behaviors of false invoicing, fraudulent tax evasion and other tax-related violations of the coal and other industries. income tax evasion and other tax-related illegal behaviors, making the tax-related and criminal risks of coal enterprises the focus of attention and crackdown. In October 2021, the fight against the three counterfeits was taken to a higher level, with the Supreme Prosecutor and the OFTA joining in, the four ministries upgraded to six departments, the special action upgraded to a regularized crackdown, the various departments sharing data, joint operations, and cracking down on various types of false invoicing and tax fraud and the related enterprises, and the tax police jointly investigating and dealing with a number of major cases of false invoicing and tax fraud in the coal field, so that the criminal risk of tax-related risks of the coal enterprises was triggered at the first sight.
In 2022, with the continuous promotion of the pilot program of "all-electric invoice" and the completion of the development of "Golden Tax IV", the tax supervision is completing the transition from "controlling tax by votes" to "ruling tax by numbers". Tax supervision is completing the transformation from "tax control by invoices" to "tax control by numbers". Relying on big data to realize precise and classified supervision, the risk of false invoicing can be effectively investigated and can be further traced upstream and downstream along the invoice chain, and the risk of tax-related risks of coal enterprises is further aggravated.
Looking at the outbreak of tax-related criminal cases in recent years, not all the subjects involved in the case have the subjective intention of false invoicing, tax fraud, tax evasion, but due to some non-compliance operations in the business process, resulting in the objective appearance of tax-related criminal behavior. It is worthwhile for enterprises and entrepreneurs to be alerted to such cases. The Research Report on Tax Compliance in Coal Industry (2023) is a special report based on Huatax's in-depth observation of the coal industry and profound summarization of the experience in representing coal enterprises in tax-related criminal cases. It summarizes and analyzes the latest data on tax-related criminal and administrative cases of coal enterprises in 2022, reveals the status quo of the coal industry's tax-related criminal risks, causes and latest changes, and puts forward suggestions for enterprises to manage compliance on such basis, with a view to providing a better solution for enterprises and entrepreneurs. The report summarizes and analyzes the latest data on tax-related criminal and administrative cases of coal enterprises in 2022, revealing the current situation, causes and latest changes of tax-related criminal risks in the coal industry, and on the basis of which, it puts forward suggestions on corporate management compliance, with a view to providing reference for coal enterprises to avoid tax-related legal risks.

Nov. 22, 2023, 6:17 p.m.

1129Views

Petrochemical Industry Tax Compliance Report (2023)

Since 2017, with the "Golden Tax Phase III" and refined oil products module coming online one after another, tax audits have been rolled out for the petrochemical industry in various places, and a large number of petrochemical tax-related cases have gradually surfaced. Unlike other invoicing crimes committed mainly for the purpose of cheating VAT, petrochemical tax-related cases are industry-specific, mainly in the form of cheque-altering cases, in which the perpetrators not only do not underpay or underpay VAT, but also create VAT tax sources for the local area, and the perpetrators engage in cheating with the purpose of evading consumption tax. From the results of tax administrative and criminal cases in various places in recent years, this type of cases shows obvious regionalization characteristics. After the refined oil invoice module went on line, new types of bill-changing transactions continued to emerge, and various types of bill-changing cases, such as industrial white oil, outsourced processing, and gasoline-to-transportation, driven by VAT interests, erupted one after another, and the risk of tax-related risks for petrochemical enterprises remained severe. Since 2022, there have been some adjustments and changes in the tax collection and management situation and priorities, types of tax-related cases and tax-related risks in the petrochemical sector. The overlay of variable ticket risk and consumption tax compliance risk makes the tax-related risks that petrochemical enterprises need to prevent and respond to more complicated. The "Petrochemical Industry Tax Compliance Report (2023)" is a legal research report compiled based on Huatax's in-depth observation of the petrochemical industry and profound summary of its experience in representing petrochemical industry tax-related cases. It aims to reveal the current situation of petrochemical industry's tax-related case handling and investigation trends, analyze the behavioral pattern changes and tax-related risks of petrochemical industry's tax-related cases, and put forward professional strategies for tax-related dispute resolution and suggestions for complying with the operation in order to provide a comprehensive solution for the petrochemical enterprises to prevent and respond to tax-related risks. The report also proposes professional strategies for tax-related dispute resolution and recommendations for compliance management, with a view to providing useful guidance for petrochemical enterprises to prevent and respond to tax-related risks.

Nov. 22, 2023, 7:57 p.m.

1259Views

Foreign Trade Industry Tax Compliance Report (2023)

In recent years, China's foreign trade has maintained a strong development trend. It has maintained the status of the world's top goods trading country for six consecutive years since 2017, and the total value of imports and exports in 2022 exceeded the 40 trillion yuan mark for the first time. The rapid development of foreign trade cannot be separated from the support of the export tax rebate policy. Export tax rebate refers to a tax system in which the state refunds to export enterprises the import tax on raw materials of exported goods as well as indirect taxes such as value-added tax (VAT) and consumption tax (CST) that have been paid at various stages of domestic production and circulation, so that exported goods can enter the international market at a price that does not include indirect taxes and participate in international competition.Between 2016 and 2021, China's tax authorities handled an accumulated total of export tax rebates (exemptions) of 8.75 trillion yuan, the In the first 11 months of 2022, the country's cumulative export tax refund (exemption) exceeded 1.7 trillion yuan. Against the backdrop of the changing international situation, the country has further improved the efficiency of export tax refunds, which has effectively energized foreign trade enterprises and reduced their burden.
In order to ensure the orderly development of the foreign trade industry and regulate the order of export tax rebates, the State has always taken a high-pressure stance to crack down on illegal and criminal behaviors such as fraudulent export tax rebates, and to curb the illegal and criminal offenses of tax cheating and fraudulent invoicing in the foreign trade industry, which has resulted in the outbreak of a number of major criminal cases. In addition, under the concept of "who exports, who collects foreign exchange, who refunds taxes, who is responsible for", the export enterprise bears most of the tax risk, or because of non-compliance with the documents can not be refunded, or involved in cases of fraudulent opening, tax fraud. Therefore, foreign trade enterprises need to strengthen tax compliance in 2023.
Based on the in-depth observation of foreign trade industry and the profound summarization of the agency experience of tax-related cases of foreign trade enterprises in recent years, Huatax team has prepared this "Tax Compliance Report of Foreign Trade Industry (2023)" to reveal the sources and causes of tax-related risks in foreign trade industry as well as the trend of tax compliance in 2023, and put forward the targeted defense strategies and compliance suggestions on the basis of which with a view to avoiding the tax administrative and criminal risks and achieving healthy tax compliance operation for the foreign trade enterprises, criminal risks and realize healthy development of compliant operation.

Nov. 22, 2023, 6:23 p.m.

1258Views

Pharmaceutical Industry Tax Compliance Report (2023)

Pharmaceutical industry, refers to the pharmaceutical manufacturing industry including chemical raw material drug manufacturing, medical device manufacturing, proprietary Chinese medicine manufacturing, Chinese medicine tablets manufacturing and other industries. The development of the pharmaceutical industry has experienced the shock of policy changes and is rapidly picking up. According to statistics, the number of pharmaceutical enterprises above the national scale continued to decrease from 7,541 in 2016 to 7,392 in 2019, but it rapidly rebounded after 2020, with a total of 8,629 as of 2021. This is on the one hand related to the gradual stabilization of the pharmaceutical industry's "two-invoice system" and other policies, and on the other hand, thanks to the incentives for a specific period of time. However, the background of the rapid development of hidden worries.
For a long time, in the field of pharmaceutical purchasing and marketing, there is a persistent problem of low efficiency and high cost of drug transportation and distribution, and at the same time, facing the doctors and medical representatives accepting kickbacks, pharmaceutical enterprises "with gold sales" and other corruption problems, forming an interlocking grey chain, the pharmaceutical enterprises due to rebates, kickbacks and costs lead to further compression of profits, thus becoming the Pharmaceutical industry false opening, tax evasion behavior repeated motive. The "two-ticket system" reform and the "4+7" centralized purchasing model seek to eliminate the problem of excessively high drug prices caused by multiple distribution links in the past from the sales chain of pharmaceutical enterprises, but because the existing distribution of benefits and the drug distribution model has not been completely changed, the costs of pharmaceutical enterprises have remained high and have begun to rise. However, due to the lack of a radical change in the distribution of benefits and the drug distribution model, pharmaceutical companies, with high costs, have begun to extract funds through bills from other areas such as the production, marketing and advertising of drugs, making the problem of invoice violations in the pharmaceutical industry still serious.20 From 2021 to 2022, a number of cases of fraudulent invoicing in the pharmaceutical industry erupted across the country, underscoring the necessity for the pharmaceutical industry to strengthen its tax compliance.
Based on the focused research on tax-related criminal cases in the pharmaceutical industry in recent years and long-term observation of the pharmaceutical industry, Huatax team prepares this "Pharmaceutical Industry Tax Compliance Report (2023)". By analyzing the policy changes and typical cases in the pharmaceutical industry since 2022, we summarize the tax risks and put forward targeted tax compliance suggestions and tax risk control and response strategies to help the healthy development of pharmaceutical enterprises.

Nov. 22, 2023, 8:11 p.m.

1801Views

Recycling Industry Tax Compliance Report (2023)

For a long time, due to the special nature of the recycling business of the renewable resources industry, the VAT input of the procurement process of renewable resources enterprises has been seriously insufficient, and in order to make up for the shortfall in input, some enterprises have obtained VAT invoices by changing their business model, third-party issuance or even purchase. As the special action of "Fighting Frauds and Crooks" has gradually deepened and turned into a regularized crackdown, a large number of cases of false VAT invoices have broken out in the renewable resources industry, and most of the enterprises and their persons-in-charge have been involved in administrative or even criminal liabilities. Under such circumstances, many enterprises have no choice but to give up obtaining input invoices and choose to use homemade vouchers for pre-tax deduction of enterprise income tax, while at the level of value-added tax (VAT), they pay VAT in full according to the sales amount when selling goods to the downstream, which greatly compresses the profit margins of enterprises.2021 On December 30, 2012, the Ministry of Finance (MOF) and the State Administration of Taxation (SAT) jointly issued the Announcement of the Policy of Improving the Value-added Tax for Comprehensive Utilization of Resources (Announcement of MOF and SAT). On December 30, 2021, the Ministry of Finance and the State Administration of Taxation jointly issued the Announcement on Improving VAT Policies for Comprehensive Utilization of Resources (Ministry of Finance and the State Administration of Taxation Announcement No. 40 of 2021), in which the provisions on the sales of renewable resources by general taxpayers can choose the simplified tax method to calculate and pay the VAT according to the 3% levy rate have greatly alleviated the problem of VAT burden in the recycling business. At the same time, in the process of handling criminal cases of false invoicing of renewable resources enterprises in the past two years, practical cases of the crime of illegal purchase of VAT invoices have appeared, and at the same time, with the reform of criminal compliance mechanism of the procuratorate system being comprehensively pushed forward in the country, the compliance of non-prosecution is also fairly utilized in the tax-related criminal cases of the renewable resources industry, and the above changes have brought a new opportunity for the defense of the tax-related criminal cases of the renewable resources industry. The above changes have brought new opportunities for the defense of tax-related criminal cases in the renewable resources industry. Based on this, in order to enable the majority of enterprises in the renewable resources industry to carry out tax management in compliance and legally, 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 has combined the continuous research of the renewable resources industry and the experience of representing the latest tax-related cases to prepare this report, which provides information on the tax environment of the renewable resources industry under the new situation of tax levy and administration, causes of the tax risks, the main tax risks and their manifestations, the tax risks and the forms of fraudulent prosecution, the tax-related criminal cases, and the tax-related criminal cases in the renewable resources industry. This report provides in-depth analysis on the tax environment of renewable resources industry under the new situation of tax administration, causes of tax-related risks, major tax-related risks and their manifestations, points of contention and defense in criminal cases of fraudulent invoicing, and tax compliance management, etc., with a view to providing useful references and reference for the enterprises of renewable resources industry.

Nov. 22, 2023, 6:29 p.m.

1618Views