Recycling Industry Tax-Related Criminal Risk Report (2022)

The renewable resources industry is an important part of the circular economy and an important way to improve the quality of the ecological environment and realize green and low-carbon development. Recycling, as the core link of the renewable resources industry, undertakes the task of "convergence" and primary processing of various dispersed waste materials, which is an important means of realization and development guarantee of the circular economy. However, since 2008, the abolition of the waste materials recycling business unit sales of waste materials exemption from value-added tax policy, renewable resources recycling enterprises have been caught in the lack of input votes and bear a large value-added tax burden, enterprise income tax deduction before the tax vouchers difficult to obtain the predicament of false openings is also becoming more serious. Since 2016, a number of domestic regions have broken out one after another renewable resources recycling enterprises false opening criminal cases, upstream and downstream involved in many enterprises, and the amount of money involved in the case is huge, once the false opening charges are established, the enterprises and personnel involved in the case are required to bear serious criminal liability. With the closing of the "fight against fraud" special action, the six ministries and commissions of the normalization of the crackdown on the ground, in order to prevent the risk of fraudulent invoicing, many recycling enterprises choose to give up to obtain input invoices, full payment of VAT in the sales process, and homemade acquisition vouchers to account for the cost of accounting, which in turn gives rise to the cost of vouchers do not comply with the need to make up for the payment of corporate income tax, the tax risks of late fees. On December 30, 2021, the Ministry of Finance and the State Administration of Taxation ("SAT") jointly issued the Announcement on Improving VAT Policies on Comprehensive Utilization of Resources (Announcement No. 40 of the Ministry of Finance and the SAT of 2021), which stipulates that general taxpayers may choose the simplified tax method for the sales of renewable resources to calculate and pay the VAT according to the 3% levy rate, which will greatly alleviate the VAT burden in the recycling business. However, it is not clear how to deal with the deduction before enterprise income tax. Against this background, in order to enable the majority of renewable resources recycling and utilization enterprises to carry out tax management in compliance with the law, strengthen internal risk prevention and control and external risk isolation, and effectively respond to and resolve tax-related criminal risks, Huatax combines the successful experience of dealing with the cases of fraudulent invoicing in recent years to write this report, which provides an in-depth analysis on the tax environment of the renewable resources industry under the new situation of tax levy and administration, the key tax issues, the triggers of the tax-related criminal risks, and the compliance with the criminal risks, etc., with a view to providing a better solution for the renewable resources recycling business. This report analyzes the tax environment, key tax-related issues, tax-related criminal risk triggers, criminal risk compliance, etc. in the renewable resources industry under the new situation of tax collection and management, with a view to providing useful reference for renewable resources recycling enterprises.

Nov. 26, 2023, 1:43 a.m.

2131Views

Scrap Material Industry Tax-Related Criminal Risk Report (2021)

Export tax rebate refers to a tax system whereby 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 (CST) that have already been paid at various stages of production and circulation in the country, so that exported goods can enter the international market and participate in international competition at a price that does not include indirect taxes. During the 13th Five-Year Plan period, according to the data released by the General Administration of Customs and the State Administration of Taxation, China's export trade volume totaled about 807,527,700,000,000 RMB, and the country handled a cumulative total of 7,073,600,000,000 RMB of export tax refunds, of which 1,454,900,000,000 RMB of export tax refunds were granted in the whole year of 2020, and the time of handling the export tax refunds has been speeding up and efficiency accelerated. Coupled with the successive implementation of paperless customs clearance by relevant departments, reform of the foreign exchange underwriting system, and facilitation of RMB settlement services for cross-border trade, the export tax rebate system has played an important supportive role for the development of the foreign trade industry and the generation of foreign exchange by export enterprises. In order to standardize the tax order, safeguard the dignity of the tax law, and curb the momentum of tax fraud and false invoicing crimes in the foreign trade industry, the state has always been in a high-pressure situation to crack down on fraudulent export tax rebates.In August 2018, the State Administration of Taxation (SAT), the Ministry of Public Security (MPS), the General Administration of Customs (GAC) and the People's Bank of China (PBOC) held a joint meeting in Beijing to deploy a two-year special action to crack down on the crimes of falsely issuing value-added tax (VAT) invoices and fraudulently obtaining export tax refunds. Two-year special action. As of January 2021, a total of 322,300 enterprises suspected of false invoicing and tax fraud have been investigated and dealt with, with a tax amount of about 85.015 billion yuan. Fraudulent export tax refund is a criminal offense with the heaviest criminal liability in the tax-related field, involving the most complicated transaction subjects and transaction links. In order to protect the security of national tax money, tax authorities in the tax collection and management, in line with the "who exports, who collects foreign exchange, who refunds, who is responsible for" principle, declared export tax rebates of foreign trade enterprises for the direct responsibility of the main body, whether the upstream enterprises flee, suspected of false openings, or upstream and downstream enterprises conspire with the foreign trade enterprises as a channel to fraudulent export tax refunds, the foreign trade enterprises are facing a more serious problem. Foreign trade enterprises are facing more serious criminal liability risks. The Report on Tax-Related Criminal Risks in Foreign Trade Industry (2021) is compiled by Huatax based on its in-depth observation of the foreign trade industry and the profound summary of its experience in representing foreign trade enterprises in tax-related criminal cases in recent years, with the aim of revealing the characteristics of the causes of the tax-related criminal risks in the foreign trade industry and the new direction of investigating and dealing with the cases of tax cheating in 2021, and on the basis of which, it puts forward the targeted defense strategies and compliance suggestions, with a view to providing a good opportunity for the foreign trade enterprises to avoid criminal risks and realize lawful and compliant operation. The report is divided into six parts. This report is divided into six parts, and the full text is about 15,000 words.

Nov. 28, 2023, 11:08 a.m.

2091Views

Coal Industry Tax-related Criminal Risk Report (2021)

Coal is the backbone of China's traditional industry. Although the State has implemented a series of regulatory systems for the coal industry, such as the quota system, mining, production and operation licensing system (the operation licenses have now been abolished), irregularities in the operation process of coal enterprises still exist and give rise to the risk of criminal liability, which not only leads to the enterprises being caught in operational difficulties, but also puts a number of entrepreneurs behind bars. There is no lack of tax-related cases in these criminal cases. Tax-related criminal cases have become the "Sword of Damocles" hanging over the heads of enterprises and entrepreneurs due to the low threshold of criminalization and heavy criminal liability. However, in these tax-related criminal cases, not all the defendants have the subjective intention of false opening, tax fraud, tax evasion, but due to the business process of some non-compliance operation led to the objective criminal behavior. It is worthwhile for enterprises and entrepreneurs to be alerted to such cases. Compliance Report on Tax-Related Criminal Risks in Coal Industry (2021) is a thematic report based on Huatax's in-depth observation of the coal industry and profound summary of its experience in representing coal enterprises in tax-related criminal cases, aiming to reveal the current situation of tax-related criminal risks in the coal industry, their causes, and to put forward defense strategies and compliance recommendations, with a view to providing references for coal enterprises to avoid criminal risks.

Nov. 20, 2023, 1:29 p.m.

1902Views

Foreign Trade Industry Tax-related Criminal Risk Report (2021)

Export tax rebate refers to a tax system whereby 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 (CST) that have already been paid at various stages of production and circulation in the country, so that exported goods can enter the international market and participate in international competition at a price that does not include indirect taxes. During the 13th Five-Year Plan period, according to the data released by the General Administration of Customs and the State Administration of Taxation, China's export trade volume totaled about 807,527,700,000,000 RMB, and the country handled a cumulative total of 7,073,600,000,000 RMB of export tax refunds, of which 1,454,900,000,000 RMB of export tax refunds were granted in the whole year of 2020, and the time of handling the export tax refunds has been speeding up and efficiency accelerated. Coupled with the successive implementation of paperless customs clearance by relevant departments, reform of the foreign exchange underwriting system, and facilitation of RMB settlement services for cross-border trade, the export tax rebate system has played an important supportive role for the development of the foreign trade industry and the generation of foreign exchange by export enterprises. In order to standardize the tax order, safeguard the dignity of the tax law, and curb the momentum of tax fraud and false invoicing crimes in the foreign trade industry, the state has always been in a high-pressure situation to crack down on fraudulent export tax rebates.In August 2018, the State Administration of Taxation (SAT), the Ministry of Public Security (MPS), the General Administration of Customs (GAC) and the People's Bank of China (PBOC) held a joint meeting in Beijing to deploy a two-year special action to crack down on the crimes of falsely issuing value-added tax (VAT) invoices and fraudulently obtaining export tax refunds. Two-year special action. As of January 2021, a total of 322,300 enterprises suspected of false invoicing and tax fraud have been investigated and dealt with, with a tax amount of about 85.015 billion yuan. Fraudulent export tax refund is a criminal offense with the heaviest criminal liability in the tax-related field, involving the most complicated transaction subjects and transaction links. In order to protect the security of national tax money, tax authorities in the tax collection and management, in line with the "who exports, who collects foreign exchange, who refunds, who is responsible for" principle, declared export tax rebates of foreign trade enterprises for the direct responsibility of the main body, whether the upstream enterprises flee, suspected of false openings, or upstream and downstream enterprises conspire with the foreign trade enterprises as a channel to fraudulent export tax refunds, the foreign trade enterprises are facing a more serious problem. Foreign trade enterprises are facing more serious criminal liability risks. The Report on Tax-Related Criminal Risks in Foreign Trade Industry (2021) is compiled by Huatax based on its in-depth observation of the foreign trade industry and the profound summary of its experience in representing foreign trade enterprises in tax-related criminal cases in recent years, with the aim of revealing the characteristics of the causes of the tax-related criminal risks in the foreign trade industry and the new direction of investigating and dealing with the cases of tax cheating in 2021, and on the basis of which, it puts forward the targeted defense strategies and compliance suggestions, with a view to providing a good opportunity for the foreign trade enterprises to avoid criminal risks and realize lawful and compliant operation. The report is divided into six parts. This report is divided into six parts, and the full text is about 15,000 words.

Nov. 20, 2023, 1:32 p.m.

1932Views

Pharmaceutical Enterprises Tax-related Criminal Risk Report (2021)

In this report, we firstly analyze the big data of more than 715 tax-related criminal cases of pharmaceutical enterprises retrieved through the referee network, Qixinbao, Enterprise Search and other platforms. On this basis, we analyze and summarize the legal application and defense strategies of major tax-related criminal offenses involved in tax evasion, false invoicing, and false VAT invoicing, as well as put forward management and control suggestions for the enterprises' compliant operation. Since the main sales market of drugs is hospitals, the co-existence of false invoicing and commercial bribery has led to the interconnection of false invoicing and bribery cases. In the cases we have searched, some of the judgments show that the cash kickbacks given by pharmaceutical representatives to doctors accounted for 10%-30%, and the motivation for false invoicing is not only to "more deductions of inputs" and "increase profits", but also to "increase profits", which is the main reason for false invoicing. In addition to "more deduction of inputs" and "increase in profits", the motivation for false driving is more based on the cash demand for commercial bribery. Since 2016, nine ministries to correct the medical purchase and marketing field and medical services in the unhealthy wind, will "crack down on false invoicing, tax evasion and other illegal behavior" as the focus of governance, since then in the corrective work, the fight against invoices related to illegal behavior has become the focus of the work in successive years. 2020 nine ministries to correct the unhealthy wind in the field of medical purchases and marketing In 2020, the nine ministries and commissions will take "cracking down on the illegal acts of pharmaceutical enterprises colluding with contract marketing organizations (CS0) to cash in fictitious fees to pay for illegal marketing expenses" as a key point of their work. Through the analysis of more than 700 cases, we found that more than 70% of tax-related criminal cases involve tax documents, and the "Letter of Concurrence on Tax Violation Cases", "Notification of Confirmed False Openings", "Audit Report", "Decision on Administrative Treatment of Taxes", and "Situation Statement on False Openings of Enterprises", etc. issued by the tax authorities have become the important evidences proving that the enterprises have constituted the criminal offenses related to taxes. As tax-related criminal cases are mostly transferred to public security organs after audit by tax authorities, the cross-cutting features of execution and punishment are more significant. According to the provisions of the Criminal Procedure Law, the evidence collected by administrative organs in administrative procedures conforms to the procedural norms and has the requirements of objectivity, authenticity and legality, and can be transformed to be applied as evidence in criminal proceedings. Whether it is the calculation of the proportion of tax evasion amount occupying the taxable amount for the tax evasion crime, or the determination of the key facts such as the amount of invoices issued for the crime of false invoicing and the amount of tax loss caused, the judicial authorities rely on the investigations of the tax authorities in the inspection procedures, or send a letter to the tax authorities for clarification. Therefore, enterprises should pay full attention to the tax audit procedure, especially the counterparty has been characterized as false invoicing invoice concurrence case, more should pay full attention to the impact of the tax audit, review procedures on criminal risk, the risk response port forward, as early as possible to hire tax lawyers to intervene. In addition, through the big data analysis of tax-related criminal cases of pharmaceutical enterprises, we also pay attention to the fact that although there is a positive correlation between the amount of false invoicing/tax evasion and the final sentence, there is a big difference in the final judgment of the same sentencing circumstances and the same amount of tax involved in judicial practice in different places. The complexity of tax-related criminal cases superimposed on the special background of the pharmaceutical industry highlights the importance of the tax risk management and control in the pharmaceutical industry, especially due to the fact that the tax audit and review procedures have already been characterized as the criminal risk. The importance of management and control, especially due to the merger of national and local taxes, the enhancement of the ability of big data tax administration, and the departmental collaboration mechanism of multiple investigations in one case, the external risk of tax-related criminal risks of enterprises has been increased, and the invoice management compliance is still the keyword for pharmaceutical enterprises to avoid the responsibility of criminal risks in the year of 2021.

Nov. 20, 2023, 1:34 p.m.

2674Views