-
"Pay First, Defraud Back": Tax Evasion or Tax Fraud? — The Dormancy of Article 204(2) of the Criminal Law and Defense Strategies
Sept. 7, 2026, 4:02 p.m.
1524Views
-
New Rules Enacted: Comprehensive Upgrade of IIT Collection and Administration on Restricted Share Transfers
Sept. 7, 2026, 11:27 a.m.
1538Views
-
Latest Case: Court Rules Tax Authority's Reduction of Invoice Quota to Zero During Risk Warning Period Illegal and Orders Revocation!
Editor's Note: Invoice-based tax administration remains an important means of current tax collection and administration. Measures such as suspending invoice issuance, restricting invoice usage, and reducing invoice quotas directly affect the lifeline of business operations. In practice, many tax authorities, after receiving risk alerts from tax big data systems, adopt "one-size-fits-all" measures to suspend or restrict invoices at the preliminary verification stage, leaving enterprises in a predicament of "being unable to issue invoices, business stagnation, and slow rights protection." In April 2026, the Panjin Intermediate People's Court rendered a final judgment in Case No. (2026) Liao 11 Xing Zhong No. 16, holding that the tax authority's act of reducing an enterprise's invoice credit quota to "zero" during the risk warning period violated statutory procedures and was obviously inappropriate, and ordered revocation according to law. Its judicial reasoning has reference value for enterprise rights protection in similar cases. This article analyzes the case from four aspects: the disputed issues and the court's judicial reasoning, the legal application path and institutional gaps of the court's judicial rules, and the implications for all parties.Sept. 2, 2026, 4:21 p.m.
1758Views
-
When an Individual Transfers Equity During the Installment Payment Period for Non-Monetary Asset Investment, Should the Outstanding Tax Be Paid in a Lump Sum? Editor’s Note:To further encourage and gu
Editor’s Note:To further encourage and guide private individual investment and alleviate taxpayers’ difficulties in raising sufficient funds for tax payment, the Ministry of Finance and the State Administration of Taxation jointly issued theNotice on Individual Income Tax Policies Related to Individual Non-Monetary Asset Investment(Caishui [2015] No. 41), which provides that individual income tax arising from non-monetary asset investment shall be paid, and if a lump-sum payment poses hardship, the tax may be paid in installments within five calendar years. If during the installment payment period the taxpayer transfers the equity interest in the investee enterprise and receives cash proceeds, such cash proceeds shall be prioritized for payment of the outstanding tax arising from the non-monetary asset investment. In practice, some tax authorities take the view that once an individual transfers the equity interest in the investee enterprise during the installment period, the installment payment plan must be terminated. This article examines whether such view has a legal basis, through the lens of a case study.Aug. 31, 2026, 4:44 p.m.
279Views
-
Deconstructing the Risk Points of the Immediate VAT Refund Policy: Legal Red Lines That Cannot Be Ignored When Enjoying Tax Benefits
Editor's Note: The renewable resources industry is a vital pillar of the circular economy system and a key area supported by national tax policies. Value-added tax (VAT) general taxpayers within the industry who sell self-produced comprehensive resource utilization products and services may qualify for the VAT immediate refund policy, with refund rates reaching up to 100%. While industry practitioners benefit from the advantages of the immediate refund policy, they must also keep compliance requirements in mind and accurately grasp the applicable conditions of the policy. Improper application may result in suspension of eligibility, supplementary tax payments and fines, or even criminal liability. This article outlines the main risk points in policy application and provides compliance recommendations for enterprises, aiming to serve as a reference for industry players.Aug. 28, 2026, 5:37 p.m.
1913Views
-
Zero-Price Transfer of Subscribed but Unpaid Private Fund Partnership Interests by Corporate Partners: Income Tax Assessment Risks Cannot Be Overlooked
Editor's Note: In the actual operation of private equity funds, transferring unpaid partnership interests to new partners at zero price is a common commercial arrangement. However, such "zero-price transfers" may trigger tax assessment risks. Starting from the legal nature of subscribed but unpaid interests, this article demonstrates that, under the premise that the partnership agreement explicitly stipulates that only partners with paid-in capital enjoy rights and interests, the fair value of subscribed but unpaid interests is zero, and a zero-price transfer has sufficient legitimate reasons; therefore, the tax authority should not levy corporate income tax. Meanwhile, this article sorts out the legal boundaries of the tax authority's assessment power and reminds enterprises of the risk scenarios that need to be vigilant about when conducting such transactions.Aug. 26, 2026, 5:33 p.m.
2084Views
-
Traditional Chinese medicine enterprises that incorrectly enjoy tax incentives for primary processin
Editor's Note: Recently, HuaShui has received a large number of consultations from traditional Chinese medicine (TCM) enterprises. Although the main products of these enterprises vary, covering products such as bezoars, small rice paper plants, and Ganoderma lucidum spores, the tax issues involved are highly consistent. Specifically, these products had previously been enjoying the corporate income tax exemption policy for primary processing of agricultural products. However, these enterprises have recently received notices from tax authorities stating that the relevant product production processes do not qualify as primary processing of agricultural products and do not meet the conditions for policy application. As a result, the enterprises are required to pay back taxes for previous years along with late payment surcharges. Among these enterprises are leading companies in the TCM industry, with the amounts of taxes and surcharges involved often reaching tens of millions or even hundreds of millions of yuan. What exactly does the scope of primary processing of agricultural products include? Can related TCM products enjoy the tax exemption policy? This article aims to explore and analyze these issues.Aug. 25, 2026, 1:07 p.m.
2010Views
-
Ongoing Adjustments to Tax Incentive Policies: How Can Enterprises Prevent Tax Risks? Editor’s Note: Recent intensive adjustments to tax incentive policies in sectors such as new energy vehicles, bat
Editor’s Note: Recent intensive adjustments to tax incentive policies in sectors such as new energy vehicles, batteries, and medical aesthetics, alongside accelerated phase-outs of local illegal tax rebates, and continued structural tax support for hard-tech fields like integrated circuits and machine tools, mark a clear "retreat" and "advance" in China's tax policy landscape. This dual movement not only reshapes corporate tax expectations but also harbors multiple risks, including retroactive recovery of past benefits and maintenance of qualification status. This article provides practical guidance for enterprises to comply with and benefit from applicable tax incentives by analyzing the policy logic, risk focal points, and compliance pathways.Aug. 21, 2026, 5:02 p.m.
2223Views
-
Chain Stores Investigated for Splitting Income to Claim Small-Enterprise Tax Benefits: How Should a Reasonable Commercial Purpose Be Assessed?
Editor's Note: Splitting the income of a single business operation among multiple affiliated small entities so that each separately qualifies as a small and low-profit enterprise and enjoys a lower tax rate has become a common way of breaking up a business to claim tax preferences in recent years. Taking as its starting point a case involving a chain automotive service brand that split store income to claim enterprise income tax benefits, this article applies the 'reasonable commercial purpose' criteria set out by the State Taxation Administration in its Questions and Answers on Issues Concerning Micro and Small Enterprises Improperly Claiming Tax Preferential Policies. It examines whether additional tax should be assessed, whether the conduct may be characterized as tax evasion, and what compliance measures businesses should take when establishing separate entities, with a view to providing guidance for relevant market participants.Aug. 19, 2026, 4:16 p.m.
2356Views
-
How Foreign Trade Enterprises Break the Tax Supplement Predicament Triggered by an Abnormal Reply Letter
Recently, many foreign trade enterprises have been denied export tax rebates by tax authorities at the tax rebate location due to abnormal reply letters issued by tax authorities of their upstream suppliers. Numerous foreign trade enterprises are confronted with similar plights: their entire procurement and export processes are compliant, with full consistency in contract flow, invoice flow, capital flow and goods flow. Nevertheless, merely due to abnormal upstream reply letters, they are denied tax rebates, taxed as domestic sales and charged late payment surcharges. Is such practice by tax authorities legally justified? This article analyzes the issue combined with practical cases and provides practical response suggestions for foreign trade enterprises.Aug. 17, 2026, 5:07 p.m.
2454Views
