Editor's Note: As the campaign to rectify the "invoicing economy" continues to deepen, fictitious trade and circular invoicing have become key targets of tax authorities' investigations. Because of their sound credit standing and strong financing capacity, local state-owned enterprises (SOEs) are often embedded in financing-oriented circular trade arrangements. Once the authenticity of the transactions is denied, they fall into the tax dilemma of "fictitious input and fictitious output". Taking as its starting point the circular live-hog trading case recently exposed by the State Taxation Administration (STA), and drawing on a practical case in which an SOE was subjected to tax treatment and penalties for participating in circular trade, this article analyzes the unreasonable tax burden resulting from the current treatment approach. Proceeding from the original intent of the rules on recovering tax on falsely issued invoices and from the principles of value-added tax (VAT), it explores the appropriate tax treatment of fictitious input and fictitious output.

Editor's Note: The revision of the Law of the People's Republic of China on the Administration of Tax Collection has long drawn the attention of the business community, tax practitioners, tax-law academics, and indeed every taxpayer. On October 22, 2026, the 74th Council of Chairpersons of the 14th NPC Standing Committee decided that the 25th Session of the Standing Committee would be held in Beijing from November 2 to 6, and recommended that the Session consider the motion submitted by the State Council for the deliberation of the draft amendment to the Law on the Administration of Tax Collection. This indicates that the draft amendment has completed the drafting stage and the examination and deliberation procedures before the State Council, and is now about to enter the deliberation stage of the Standing Committee. How many deliberations the draft amendment will undergo, when the public will be able to see the draft text, and how the previously disputed provisions will be handled are questions of common concern. This article analyzes these issues in light of the provisions of the Legislation Law and recent legislative practice, with a view to helping all parties track the progress of this revision and participate in the legislative process.

Editor's Note:The medical device industry involves lengthy procurement and sales chains, with multiple parties participating in transactions, including manufacturers, distributors, medical institutions, and third-party service providers. Tax risks primarily arise in areas such as sales revenue recognition, the deduction of costs and expenses, and invoice management. Since the beginning of 2026, as special tax enforcement campaigns targeting the medical device sector have continued to intensify, tax violations in the industry have attracted increased scrutiny from tax authorities. Drawing primarily on publicly disclosed tax enforcement cases involving the medical device industry since 2026, this article examines typical tax-related violations in the sector and puts forward corresponding tax compliance recommendations.

Editor’s Note

A typical red-chip structure is established when domestic enterprises or individuals set up holding companies in offshore jurisdictions as offshore listing vehicles, which then control domestic operating entities through equity holdings or contractual arrangements, enabling domestic entities to raise capital via indirect listing on overseas capital markets. Based on the control mechanism, red-chip structures fall into two categories: equity-controlled structures and VIE (Variable Interest Entity) agreement-controlled structures.

Editor's Note: The circumstances in which an upstream supplier absconds and becomes uncontactable, is listed as a non-normal taxpayer, or is characterized as having falsely issued invoices are frequently encountered in practice, and the resulting spillover of risk is becoming a real predicament for many downstream enterprises. Invoices that the recipient has already entered in its books and already used for deduction are determined by the tax authorities to be abnormal value-added tax deduction vouchers, and the recipient is consequently required to reverse the input tax amount or pay supplementary tax, among other measures. While such measures prevent the loss of state tax revenue, they nevertheless draw enterprises engaged in genuine transactions passively into tax-related risk. Why are invoices determined to be abnormal? Once such a determination is made, what rights does the recipient have, what risks does it face respectively with respect to value-added tax and enterprise income tax, and what measures should it take to reduce its losses? This article analyzes the foregoing questions.

Editor's Note: The export tax refund is an institutional arrangement by which the State encourages foreign trade exports. It should have served as a policy dividend driving the development of foreign trade enterprises, yet it has been distorted by lawbreakers into an unlawful channel for siphoning off state treasury funds. On March 20, 2024, the Supreme People's Court and the Supreme People's Procuratorate issued the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases Endangering Tax Collection and Administration (Fa Shi [2024] No. 4), which regulates the thresholds for criminalization and the types of conduct constituting the crime of fraudulently obtaining export tax refunds, marking a new stage in the governance of tax fraud crimes characterized by precise identification and severe punishment. Drawing on six cases of fraudulently obtaining export tax refunds recently disclosed in a concentrated manner, this article analyzes the latest developments in tax fraud crimes from four dimensions — case introduction, deconstruction of the methods employed, audit logic, and risk alerts — so as to provide compliance references for relevant enterprises.

Editor's Note: On July 24, 2026, the Ministry of Finance and the State Taxation Administration issued the Announcement on Matters Concerning Individual Income Tax on Offshore Trusts (Ministry of Finance and State Taxation Administration Announcement No. 21 of 2026) (hereinafter referred to as the "Announcement"), which clarifies the taxation rules for offshore trusts at the stages of establishment, existence, and termination/liquidation. At the same time, it grants a golden window period to taxpayers who have already established offshore trusts. Those who pay individual income tax in accordance with the requirements of the Announcement within 90 days from the date of implementation of the Announcement (by October 22, 2026) will not be charged late payment penalties. As of the date of implementation of the Announcement, 82 days have passed. How has tax administration practice unfolded? How do tax authorities precisely identify offshore trust taxpayers? How can taxpayers seize the final window period to complete their tax filings in compliance? If they fail to complete the filings, what tax risks will they face? This article intends to provide analysis and reminders for readers' reference.

Editor’s Note: Where an enterprise that has not paid the tax in dispute can only bring a lawsuit against the tax penalty decision, whether the people’s court should review the facts found in the tax treatment decision has long been the subject of inconsistent rulings. On September 17, 2026, the Q&A session of the ninth installment of the Supreme People’s Court’s “Administrative Adjudication Lecture Hall” responded to this issue. This article interprets the Q&A opinion point by point and, by comparison with Administrative Judgment (2026) Qiong 01 Xing Zhong No. 116 of the Haikou Intermediate People’s Court, which takes a position different from that of the Q&A opinion, sets out the review rules established by the Q&A opinion.