Editor's note: Recently, many local tax bureaus have investigated and dealt with multiple cases of tax intermediaries. Tax intermediaries engage in tax planning through illegal methods such as concealing income and issuing false invoices. The 2024 China Tax Annual Report released by the State Administration of Taxation clearly pointed out the need to strengthen supervision of tax-related professional service agencies and enhance comprehensive governance of illegal and irregular behaviors of tax-related intermediaries. It can be seen that the state maintains a high-pressure situation on the illegal and irregular behavior of tax-related intermediaries, and the regulatory efforts have not decreased at all. Therefore, for practitioners in this industry, it is urgent to regulate their professional behavior and strengthen tax compliance. Based on this, this article will combine some cases to analyze the tax risks faced by tax intermediaries.

Ⅰ、The Case introduction: Multiple tax intermediaries were penalized for violations Law Plan

In public cases, tax intermediaries often use concealed income, malicious fabrication, and the use of tax incentives to illegally plan taxes for others, achieving illegal tax evasion and other purposes.

（Ⅰ）In the field of online entertainment: concealing income under various pretexts Tax evasion

The Inspection Bureau of the Heze Municipal Taxation Bureau of the State Administration of Taxation has lawfully investigated and dealt with a case of tax evasion involving a tax intermediary agency using various methods to collect and conceal income. The company involved in the case, Heze Wukong Enterprise Management Co., Ltd., reported a revenue of only over 3 million yuan in three years, but the self-media platform promoted a team of more than 80 people, and the team's size and income were clearly not matched. The tax bureau compared the transaction details and contract contents of the involved companies and found that the companies concealed their income from 2021 to 2023 with the help of tax intermediaries. According to Article 32 and Article 63 of the "People's Republic of China Tax Collection and Administration Law", the inspection bureau made a decision on the handling and punishment of the enterprise in accordance with the law. The enterprise should pay a total of 459,800 yuan in taxes and impose a late fee of 160,300 yuan. At the same time, A fine of 227,100 yuan was imposed on the company for tax evasion, with a 50% underpayment of taxes.

（Ⅱ）Finance and Tax Consultancy Field: Hiding income and evading taxes with private accounts

The company involved in the case, Lijiang Runzhong Financial and Tax Management Consulting Co., Ltd., collected operating funds from the legal representative's private account and corporate account from 2019 to 2023, partially did not record them, concealed income, and made false tax declarations. This resulted in a total of 56,700 yuan underpayment of value-added tax, corporate income tax, and other taxes. In accordance with Article 63, Paragraph 1 of the "Tax Collection and Administration Law of the People's Republic of China", the tax authorities have lawfully recovered the underpaid taxes and fees, imposed late fees, and imposed fines on the enterprises involved. Currently, the taxes, fees, and fines involved in the case have been recovered and stored.

In this case, the tax intermediaries engaged in tax evasion by setting up private and public accounts and establishing two sets of books. Some enterprises believe that as long as the income does not enter the public account and is not invoiced, they can evade inspection by the tax authorities and achieve tax evasion. However, with the use of big data taxation and other means, the tax authorities are increasingly using various methods to inspect taxes, such as comparing similar enterprises and upstream and downstream tax data, making it difficult for tax intermediaries to evade taxes.

（Ⅲ）Agriculture: Assisting service objects in developing fake invoices

Pang Mingwei, the legal representative of Kashgar Longxian Enterprise Management Consulting Co., Ltd., knowing that the six companies he represented were engaged in fraudulent use of others' information and false acquisition business, still assisted the service recipients in issuing 277 false agricultural product purchase invoices, involving an amount of 21.9012 million yuan. The deducted value-added tax amount is 1.9711 million yuan. The relevant enterprises involved in the case have been transferred to judicial authorities for processing, and the taxes, late fees, and fines involved are currently being recovered. Currently, Pang Mingwei has been sentenced to 3 years in prison with a 4-year probation and fined 110,000 yuan for the crime of issuing false invoices for tax deduction. In addition, in accordance with the provisions of the "Measures for the Supervision of Professional Tax-related Services (Trial)", the tax bureau has taken measures such as including the individuals involved in the tax-related service dishonesty list.

（Ⅳ）In the field of equity transfer: collusion and Public officials Steal Taxes

Feng, from a tax bureau in a certain district of Chongqing, colluded with unscrupulous tax intermediaries, took advantage of his position, accepted requests from tax intermediaries, and provided assistance in handling matters such as equity transfer tax registration changes for enterprises, and repeatedly accepted property from relevant personnel. In accordance with relevant regulations such as the "Disciplinary Regulations of the Communist Party of China" and the "Administrative Sanctions for Public Officials of the People's Republic of China", the tax authorities expelled Feng from the Party and dismissed him from public office, while recovering more than 4.8 million yuan in tax losses. Feng was sentenced to five years in prison for the crime of bribery. The local tax authorities have dealt with relevant tax-related intermediaries in accordance with regulations

（Ⅴ）Other areas: Tax evasion through tax incentives Individual business

The Second Inspection Bureau of the Changzhou Municipal Taxation Bureau of the State Administration of Taxation, based on tax big data and related clues, has lawfully investigated and dealt with the case of a certain information service company in Changzhou issuing false value-added tax special invoices. It was found that the tax agency issued VAT special invoices for itself through three individual businesses of its own Control, and planned to issue VAT special invoices to service recipients without real business dealings. Illegal gains of 294,500 yuan were obtained.

Ⅱ、The Legal risks faced by tax intermediaries Law Plan

As professional tax service institutions, tax intermediaries, knowing the legal provisions, still engage in a series of illegal tax evasion behaviors. Tax intermediaries will face administrative and criminal legal risks.

(Ⅰ) Administrative Responsibilities Faced by Tax Intermediaries

Tax intermediaries providing tax services to others in violation of the law or administrative regulations have caused the principal or themselves to pay less or not pay taxes. They may face the following legal risks: Firstly, the behavior of tax intermediaries violates the provisions of Article 63, Paragraph 1 of the Tax Collection and Administration Law, which may result in taxpayers or themselves being punished with fines ranging from 50% to five times the amount of taxes not paid or underpaid. Secondly, according to Article 93 of the "Implementation Rules of the Tax Collection and Administration Law," if tax intermediaries provide convenience for taxpayers to evade taxes, the tax authorities can confiscate the illegal gains of tax intermediaries. In addition, tax-related intermediaries will be fined up to 1 times the amount of tax that has not been paid, underpaid, or fraudulently obtained. Thirdly, according to Article 15 of the "Measures for the Supervision of Tax-related Professional Services (Trial)", tax authorities can take measures such as including tax-related intermediary institutions in the list of dishonest tax-related services, and include tax-related intermediary institutions in the focus of supervision. Downgrade their credit rating or include them in their credit records, and suspend their tax-related business for a period of time. In summary, when tax intermediaries engage in illegal activities, they not only face administrative penalties such as fines, but also face penalties such as suspension of tax-related business.

(II) Criminal Responsibility Faced by Tax Intermediaries

When tax intermediaries illegally provide tax planning services for others, if the amount of tax evasion by the taxpayers reaches the standard for criminal liability, the illegal tax planning behavior of the tax intermediaries may be implicated, leading to criminal risks of tax evasion, and the tax intermediaries may face charges such as tax evasion. In addition, during the process of providing services to taxpayers, if tax intermediaries illegally provide services such as issuing false invoices for taxpayers to defraud tax, their actions may be involved in the criminal liability of issuing false invoices.

Of course, if a tax-related intermediary can prove that it was unaware of the taxpayer's tax evasion or tax avoidance, had no subjective intention to assist the taxpayer in tax evasion or tax avoidance, and had fulfilled its reasonable review obligations during the service process, and the taxpayer provided false information through deception or fraud, causing the intermediary to unknowingly provide convenience for the taxpayer resulting in tax evasion or tax avoidance, the intermediary can actively defend itself and claim that it does not constitute a crime.

Ⅲ、The Conclusion

Tax intermediaries should use their professional knowledge, adhere to the basic principles of professional service and professional ethics, consciously enhance their awareness of integrity, social responsibility, and law-abiding consciousness, operate in accordance with the law and regulations, and establish a good industry image with professional and high-quality services, promote the healthy development of the tax intermediary industry, and prevent relevant tax risks while ensuring service quality.