Recycling of renewable resources is a key link in the comprehensive utilization of resources, and is of great significance in promoting the development of circular economy and realizing green, low-carbon and high-quality development. This year, the State Council has issued a number of documents to promote the construction of waste recycling system, accelerate the green transformation of the development mode, "to promote large-scale equipment renewal and consumer goods for the old for the new action program" (State Development [2024] No. 7) put forward the promotion of resource recycling enterprises to the natural person of end-of-life product sellers "reverse invoicing" practice, and the promotion of resource recycling enterprises to the natural person of end-of-life product sellers "reverse invoicing" practice. Improve tax policy support. For a long time, the lack of "source invoices" has been restricting the development of resources recycling industry. Based on the aforementioned policy guidance and industry difficulties, on April 24, the State Administration of Taxation issued the "Announcement on Matters Relating to "Reverse Invoicing" by Resource Recycling Enterprises to Sellers of End-of-Life Products to Natural Persons". "(SAT Announcement No. 5 of 2024, hereinafter referred to as "Announcement No. 5"), which makes specific provisions on the scope of invoicing parties, invoicing requirements, invoice functions and tax supervision of the policy of "reverse invoicing". Notice No. 5 makes specific provisions on the scope of the "reverse invoicing" policy, invoicing requirements, invoice functions and tax supervision. Reverse invoicing in the resource recycling segment involves the tax payment of the seller and the VAT input credit and pre-tax deduction of the recycling enterprise, so it is important to correctly understand the requirements and responsibilities of the main parties in the "reverse invoicing" business, Correctly understanding the requirements and responsibilities of each subject in the business of "reverse invoicing" and the impact of "reverse invoicing" on the recycling business are of great significance for improving the degree of business compliance and avoiding and preventing tax-related risks.

Recently, China Taxation News published an article entitled "The sharp sword is high to deal with iron cases, so that the "false self-employment, real agent" tax fraud has nothing to hide". In the article, Company Z was found to have subjective fault by tax authorities and three judicial organs for implementing the behavior of "fake self-employment and real agency", which in turn constituted tax fraud. In the author's opinion, this viewpoint is inappropriate, based on which, this article starts from the practice case, whether the implementation of "fake self-employment, real agency" is equivalent to tax fraud? The subjective element of tax fraud at the level of administrative penalty is "knowledge" or "subjective fault" to analyze, and then warn the foreign trade enterprises to be alert to the risk of passive involvement in tax fraud in conducting business for readers' reference.

The Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law to the Handling of Criminal Cases of Endangering the Administration of Tax Levies (Legal Interpretation [2024] No. 4) makes it clear that false invoicing that does not aim at fraudulently offsetting the taxes and does not result in a fraudulently lost tax due to the offsetting does not constitute the offence of falsely invoicing for value-added tax. Accordingly, it can be seen that the legal interests protected by the offence of false invoicing of VAT specifically refers to the VAT collected and managed by way of credit, and this conclusion is not created by the judicial interpretation of the Supreme People's Court and the Supreme People's Procuratorate, but is the original meaning of the criminal law, which is also applicable before the implementation of the judicial interpretation of the Supreme People's Court and the Supreme People's Procuratorate. Tax-related cases in the petrochemical industry mainly infringed upon the interests of consumption tax, and the perpetrators usually did not have the purpose of fraudulently offsetting VAT, nor did they have the possibility of causing VAT losses. However, in the past, in the trial of petrochemical tax-related cases, many courts did not make appropriate purposeful interpretations of the criminal law, and did not accurately determine the tax interests infringed upon by petrochemical tax-related cases, which led to a large number of such cases being convicted of the offence of fraudulently opening VAT special invoices. We are of the view that cases in the petrochemical industry that have been convicted of false invoicing have been incorrectly identified as facts and incorrectly applying the law, and that appeals can still be actively filed.

Affiliated transactions are common transactions between group companies, and business transactions such as equity transfer, capital lending and borrowing, and purchase and sale of goods or services between affiliated enterprises are relatively common. At present, China's legislation on anti-avoidance procedures between related enterprises is mainly based on the field of cross-border related transactions, and has already formed a more professional and complete methodology as well as handling procedures, but how to investigate and adjust related transactions of domestic enterprises has not yet been formed into clear provisions. In practice, there are certain disputes on whether the special tax adjustment procedures can be applied to domestic connected transactions, and there are different views on whether the transactions between connected entities with the same effective tax burden in China can not be adjusted. Based on the recent case of a listed company's subsidiaries being adjusted to pay back tax, the author analyzes the common controversial issues of domestic connected transactions and puts forward risk prevention suggestions.

Due to the operating characteristics of the coal industry, a large number of coal enterprises have the chronic problem of separation of invoices and goods at the purchasing end. In the past, due to the false VAT invoices legislation adopts a simple crime, the judicial authorities that there is a false invoicing that constitutes the crime, the coal industry, the separation of votes and goods belongs to the original judicial interpretation of the false invoicing, but also the false invoicing of the crime of criminal responsibility. Recently, the Supreme People's Court and the Supreme People's Procuratorate issued the "Interpretation of Several Issues Concerning the Application of Law to the Handling of Criminal Cases of Endangering the Administration of Tax Collection" (Law No. 4 [2024] ), which makes clear provisions on the elements of the crime of false invoicing, and at the same time, also makes clear that false invoicing that does not aim at fraudulently offsetting the taxes and does not result in fraudulent loss of tax due to the offsetting should be out of the crime. For cases involving invoices in the coal industry in which the court trial process directly qualifies the offence of fraudulent invoicing without examining the subjective purpose of the perpetrator or the objective harmful consequences of the act, a complaint may be actively lodged.

It is a common structural arrangement for most enterprises to implement equity incentive to build a shareholding platform through partnerships, limited liability companies and other organizational forms. The shareholding platform has great advantages in controlling the number of direct shareholders, ensuring the founder's control rights and improving the convenience of changes in equity. In addition, in the past, some places adopted the approved levy policy for shareholding platforms, which greatly reduced the tax burden compared with direct shareholding. However, in recent years, there have been cases of tax evasion by using the approved collection policy to split income and transfer profits. The "tax depression" formed based on the approved collection policy has also been controversial because of its lack of legal basis, undermining fair competition in the market and leading to competition for tax sources. In 2021, in the interpretation of Opinions on Further Deepening the Reform of Tax Collection and Management, State Taxation Administration of The People's Republic of China Inspection Bureau pointed out that the use of "tax depressions" to evade taxes was one of the key areas to be cracked down. At the end of 2021, the Announcement on the Collection and Management of Personal Income Tax from Equity Investment Management made it clear that all equity investment partnerships are subject to audit and collection, and recently, auditing and taxation departments have also clearly put forward the "small policy" to clean up the irregularities in attracting investment. Based on the aforementioned collection and management situation, the application space of the approved collection policy has been tightened, and the tax burden advantage of building a shareholding platform through partnerships and limited liability companies is no longer available. Therefore, in recent years, there have been many transactions that cancel the shareholding platform and change to direct shareholding. In the cancellation of shareholding platforms such as partnerships or limited liability companies, many issues such as whether the non-trading transfer of shares requires tax, and the joint liability of shareholders when the cancelled enterprises owe taxes have caused heated discussions. Based on two cases of dismantling the shareholding platform, this paper analyzes the tax liability and tax-related risks of non-transaction transfer for readers' reference.

The State Administration of Taxation (SAT) proposed on April 9 at the "Symposium for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in" that "reverse invoicing" for resource recovery enterprises should be realized by the end of April, and stated: "Further smooth the VAT ded uction chain through the implementation of "reverse invoicing", and give resource recycling enterprises standardized and legal pre-tax deduction vouchers for enterprise income tax ". If the news of the above-mentioned symposium is accurate, will the reverse invoicing of renewable resources have the dual functions of VAT deduction and pre-tax deduction, thus realizing a similar system design as the current purchase invoices for agricultural products?

This year, the State Council has repeatedly issued documents to promote the construction of a waste recycling system, accelerate the green transformation of the development mode, "on accelerating the construction of a waste recycling system of opinions" (State Council [2024] No. 7) pointed out that we should promote the fine management and effective recovery of waste, improve the level of waste resourcing and reuse, and cultivate and grow the resource recycling industry; "to promote the large-scale The Action Program for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in (Guo Fa [2024] No. 7) improves the quality and level of recycling in the national economy by implementing the four-pronged initiatives of equipment renewal, consumer goods trade-in, recovery and recycling, and standard upgrading. At the local level, Sichuan Province issued the "Sichuan Province Renewable Resources Recycling Industry Development Plan (2023-2025)", Hefei City issued the "Hefei Waste Material Recycling System Construction Implementation Plan" and other documents to promote the construction of waste material recycling system. The resources recycling industry is of great significance in improving the level of resource recycling and promoting green, low-carbon and recycling development, and it is an industry field that governments around the world attach importance to and encourage the development of. In terms of taxation, the recycling of renewable resources, comprehensive utilization of the field of policy changes, in order to promote compliance, improve profit margins, the business model of the resources recycling industry has also been adjusted, and at the same time also accompanied by a number of tax compliance issues. Recently, new tax regulatory developments such as strict investigation of tax rebates and promotion of reverse invoicing have triggered heated discussions in the renewable resources recycling industry. Previously, Hwuason Law Firm has analyzed the tax risks of recycling enterprises, and this article extends downstream of the renewable resources recycling industry to analyze the tax-related risks and compliance suggestions of waste-using enterprises under the new regulatory trends.