Editor's Note:  In March this year, the Supreme Court and the Supreme Prosecutor jointly issued the Interpretation of Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Tax Collection and Administration (Legal Interpretation [2024] No. 4, hereinafter referred to as the Interpretation). The following month, the Supreme Court, the Supreme Prosecutor of the relevant judges, prosecutors were written on the Interpretation of the understanding and application of the Interpretation of which the distinction between the crime of false VAT invoicing and the crime of illegal sale of VAT invoices triggered a controversy, but also affects the direction of the practical decision, a number of cases were re-sentenced to the crime of illegal sale of VAT invoices. I learned that, following the case of Zhejiang Shen's Provincial Logistics, the case of false VAT invoicing of a network freight platform in Sichuan was also settled, and the Offense of false VAT invoicing was re-sentenced to the Offense of illegal sale of VAT invoices, and the two main culprits were sentenced to more than ten years. This article takes this as an entry point to discuss whether it is appropriate to re-sentence this kind of case for platform enterprises and analyze how the “activation” of the crime of illegal sale of VAT invoices will affect the development of platform enterprises in practice.

I.Practical observation:Does not constitute the Offense of false VAT invoicing,then in accordance with the Offense of illegal sale of VAT invoices

This article collects the “Interpretation” after the introduction of the crime of illegal sale of VAT invoices conviction of some cases, you can see that the practice began to the Offense of false VAT invoicing does not constitute the crime of illegal sale of VAT invoices, specifically the following:

(I) (2024) Xiang 1226 Criminal No. 38: Inflated prices and fictitious transactions were convicted of the Offense of illegal sale of VAT invoices

Basic facts: In order to create the illusion of the existence of real goods transactions, the defendants in this case, Wu Moumou and Feng Mou and others, purchased cheap electronic components with a purchase price of only RMB 0.175 to RMB 0.23 per unit of false secondary processing, and then increased the selling price of these cheap electronic components with no actual function to RMB 169.5 per unit, and sold them to the downstream company. After the downstream company paid for the goods, the defendant deducted 5% of the invoice amount as a favor fee, and then returned the payment to the downstream company by means of multiple transfers from other people's accounts and issued invoices. In the end, the court ruled that Wu was guilty of illegally selling VAT invoices and sentenced him to ten years' imprisonment and a fine of RMB200,000 yuan.

Legal analysis: According to the description of the case, the enterprise involved in the case was a local enterprise enjoying the prize subsidy, and it obtained the financial rebate by inflating the price to meet the conditions of the prize subsidy, and the rebated prize subsidy did not belong to the tax, and there was no loss of tax, in addition, although there was the circumstance of inflating the price in this case, as long as the VAT was paid in accordance with the actual transaction price, and there was no loss of VAT in terms of the whole chain of transactions, so it should not constitute the crime of illegally selling special invoices and was sentenced to 10 years of prison. offense and was convicted of the Offense of illegal sale of VAT invoices instead.

(II) (2023) Shanghai 0117 Criminal No. 1229: Offense of false VAT invoicing for labor services and sentenced of illegal sale of VAT invoices.

Basic facts: Wu Moumou and Yao Moumou, as the legal representative and deputy general manager of Company A respectively, conspired with Zhou Mou, the de facto controller of Company B, to falsely issue VAT invoices for labor services through Company A for the construction project contracted by Company B. The two parties signed a false labor service invoice. The two parties signed a false labor subcontracting contract, and Company B paid Company A an invoicing fee of 3.8% to 4% of the face amount and a management fee. 160 VAT invoices were issued by Company A for Company B, involving a tax amount of more than 830,000 yuan, with the total value tax amounting to more than 28 million yuan. The two defendants were prosecuted for the crime of false VAT invoices, and the court finally ruled that Wu Moumou and Yao Moumou were guilty of illegally selling VAT invoices. Both Wu and Yao were sentenced to two years and two months' imprisonment and two years and two months' probation.

Legal Analysis: The judge of this case held that “subjectively, the two of them did not have the purpose of cheating the state tax, and objectively, it was found that there was insufficient evidence to cause the loss of state tax, therefore, it did not constitute the Offense of false VAT invoicing”, and in the case where it was difficult to meet the conditions for proving the Offense of false VAT invoicing, it was replaced with the crime of illegal sale of invoices, which had a lower threshold of guilt. Offense of illegal sale of VAT invoices.

(III) (2024) Anhui 0826 Criminal No. 92: the invoicer was unaware of the fact that the invoice was set off and was convicted of illegal sale.

Basic case: Fu Moumou and Wang Moumou (another case) conspired, the A company operated by Fu Moumou to Wang Moumou operated by B company false VAT invoices, Wang Moumou according to the invoice amount of 4% to pay the benefit fee. During the period from September 2019 to October 2020, Fu Moumou falsely issued 29 VAT invoices to Wang Moumou, with a total face amount of RMB 2897,545, and a total tax amount of RMB 333,345.87. The final verdict was that Fu Moumou was guilty of illegally selling VAT invoices, and was sentenced to ten months' imprisonment, suspended for one year and four months, and a fine of RMB 20,000 yuan.

Legal analysis: the decision of this case that “the defendant Fu Moumou and Wang Moumou when discussing the false invoices defendant Fu Moumou to Wang Moumou whether the false invoices to offset tax without knowing.” , as in case two, in the difficulty of proving the joint criminal intent of the invoicing party, the case is difficult to meet the standards for proving the Offense of false VAT invoicing, to the Offense of illegal sale of VAT invoices.

(Ⅳ) Summary: Is it reasonable and lawful to reclassify a case that does not constitute the Offense of false VAT invoicing as the Offense of illegal sale of VAT invoices?

The above three cases all dealt with the case not constituting the crime of false VAT invoicing as the crime of illegal sale of VAT invoices, and none of their adjudicating documents made a clear demarcation between the crime of illegal sale of VAT invoices and the crime of false VAT invoicing, which generated some confusion. As can be seen from some of the statements, the referee's thinking generally follows the viewpoints of the Supreme Court article, so this article will comment on the relevant viewpoints of the Supreme Court article.

Ⅱ. Legal analysis: the meaning of the constituent elements is unclear, Offense of illegal sale of VAT invoices or become a “pocket crime”

(I) The division standard of the two crimes under the viewpoint of the Supreme Law article

In the past, the practice of selling blank invoices for the Offense of illegal sale of VAT invoices, the issuance of VAT invoices that do not correspond to the real transaction for the Offense of false VAT invoicing, the two crimes are clearer, which is discussed in detail in the previous article, will not be expanded. The Understanding and Application of the “Interpretation and Application of Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Tax Collection and Management” (hereinafter referred to as the “Understanding and Application”) issued by the Supreme Court Judge has re-discussed the constituent elements of the two offenses, activated the crime of illegal sale of VAT invoices, and blurred the boundary between the two offenses.

According to the discussion of the Understanding and Application, the constitutive elements of Offense of false VAT invoicing are, firstly, the need to utilize the credit function of VAT in terms of the means of behavior, and secondly, the purpose of fraudulently offsetting tax or the result of causing loss of tax. Offense of illegal sale of VAT invoices is discussed as follows: “For the invoicing party, if it cannot be proved that there is a common intention between it and the invoiced party, its behavior of collecting ‘invoicing fee’ and ‘tax point’ and then issuing invoices for other people is essentially treating the VAT Special invoices are sold as commodities, which is an illegal sale of VAT special invoices”. Combining the protection of legal benefits of the crime of illegal sale of VAT invoices and the above discussion, it can be seen that the Supreme Law considers the constitutive element of the crime of illegal sale of VAT invoices to be only the act of “selling VAT invoices as commodities”, which is a pure behavioral crime. Offense of false VAT invoicing from the point of view of the constituent elements of illegal sale of VAT invoices include the constituent elements of the two offenses of illegal sale of VAT invoices, so the division of confusion.

(Ⅱ) Theoretical problems of the Supreme Court's view

1. Causing confusion in the criminal law system

Offense of illegal sale of VAT invoices for the “vouchers as commodities for sale” behavior, from the literal meaning of false invoices into the crime of illegal sale of VAT invoices, so long as the behavior of false VAT invoicing, it may constitute illegal sale of VAT invoices, and its incrimination standard is low. Compared with the Offense of illegal sale of VAT invoices, the Offense of false VAT invoices needs to satisfy the more stringent purpose or result elements, but the legal penalties of both are the same. In terms of jurisprudence, the more severe criminal liability should be matched with a harsh entry standard in order to satisfy the principle of the appropriateness of crime and punishment, and the application of the same statutory penalties to the two crimes, which have a clear hierarchical distinction in terms of constituent elements and entry thresholds, will inevitably lead to confusion in the criminal law system.

2. Contrary to the legislative purpose of “limiting the circle of crime”.

On the one hand, the “Interpretation” and “Understanding and Application” of the Offense of false VAT invoicing has a clear tendency to limit, that “(false invoicing)” “behavioral crime that” the low threshold of incrimination, and the crime of the statutory penalty configuration is not coordinated, full of controversy, the crime of limiting the interpretation has become a consensus ”, the simple act of false invoicing from the crime of false VAT invoices; on the other hand, the false invoicing into the crime of illegal sale of VAT invoices in the regulation of the crime of illegal sale of VAT invoices and the crime of false VAT invoices of the criminal responsibility, in fact, make the crime of mismatch between responsibility and behavior is more prominent, completely contrary to the “Interpretation of the” the legislative intent, may lead to the crime of illegal sale of VAT invoices to hollow out the crime of false VAT invoices. The crime of illegal sale of special invoices may lead to the hollowing out of the crime of false invoicing.

At the same time, the “Understanding and Application” of the intention of the “shell companies,” “all comers” invoicing behavior from the strict crackdown, but from the practice, part of the adjudication of cases in which the defendant is not a shell company, only a false invoicing of an enterprise, etc., but also be characterized as illegal The crime of selling special invoices obviously deviates from the original intent of the Understanding and Application, resulting in an overly broad scope of crackdown, which will have a certain negative impact on the real economy.

Ⅲ. The compliance situation of platform enterprises is grim, and the criminal risk is climbing

(Ⅰ) Lowering the burden of proof on the procuratorial authorities, making it easier for platform enterprises to constitute a crime

Offense of illegal sale of VAT invoices to regulate the behavior of false invoicing, the Understanding and Application of part of the reason given is to take into account the subjective intent of false invoicing forensic difficulties, so through the illegal sale of VAT invoices of the crime of this crime to reduce the procuratorate's forensics, the determination of the difficulty. It is mentioned in the Understanding and Application that “only the evidence that the invoicing party has received money from the other party and issued the VAT special-purpose goods as commodities to the other party can be recognized, which is conducive to the accusation of this kind of crime.” This means that previously, the procuratorial authorities needed to prove that the platform enterprise had a conspiracy with the invoiced enterprise to fraudulently offset the national tax by means of false VAT invoicing as well as the specific amount of tax loss caused, while now it may only need to prove that there is a return of the funds to constitute the Offense of illegal sale of VAT invoices, which is the same as the Offense of false VAT invoicing in terms of the penalty. This paper believes that the Understanding and Application of the reasons are biased, the criminal law is modest, the prosecution has the burden of proof is to protect the rights of citizens, to prevent the dumping of public power as a basic means of solving the practical difficulties should be from in-depth theoretical research, improve the technical means to start, should not be reduced by lowering the threshold of the crime to reduce the burden of proof of the prosecuting authorities.

The Understanding and Application of the key reference to shell enterprises and through the network transaction “all comers” invoicing enterprises need to be severely cracked down. Platform enterprises often provide intangible services, to network freight platform enterprises, for example, car-free carrier mode of the platform does not have its own transportation fleet, once the audit is easy to be judged as a shell enterprise. In addition, the platform enterprises have a wide range of radiation, the ticket enterprises, the audit of the information provided by the customer is difficult, once it is difficult to provide sufficient information to prove that they have fulfilled their obligations to audit and the customer business is real, it is easy to be judged as a “refusal of all” type of enterprises. Therefore, platform enterprises face greater criminal risks than other enterprises.

(Ⅱ) The felony threshold for the Offense of illegal sale of VAT invoices is lower, and it is easier for platform enterprises to constitute felonies.

Articles 14 and 15 of the Interpretation stipulate that if any of the conditions are met, the illegal sale of VAT invoices with a nominal tax amount of more than five million yuan or more than 500 copies with a nominal tax amount of more than three million yuan shall meet the sentencing standard of more than ten years, which is more than the Offense of false VAT invoicing, and there is an additional condition of “more than 500 copies with a nominal tax amount of more than three million yuan”. Compared with the offense of false invoicing, there is an additional condition of “more than 500 copies and the tax value of the invoice is more than three million yuan”. The platform enterprise's downstream recipient enterprises are extensive, and the number of invoices issued is large, even if the total tax amount does not reach 5 million, it may be sentenced to more than ten years of imprisonment.

(III) The Offense of false VAT invoicing may be hollowed out, and it is more difficult for platform enterprises to be convicted.

The second paragraph of Article 10 of the Interpretation specifically provides for the conditions of Offense of false VAT invoicing, and many cases have been acquitted in practice. However, it can be seen from the above that it is easier for platform enterprises to be characterized by the Offense of illegal sale of VAT invoices compared to other enterprises, while the Offense of illegal sale of VAT invoices does not have an exculpatory clause, and there are fewer defenses, so the platform enterprises in the same case may face different judgments, and the risk is higher.

Ⅳ. the re-sentencing of illegal sale of special invoices failed to solve the problem of inputs and costs of the enterprises receiving the invoices, and the risk of double taxation increased instead

In practice, some courts take into account the platform enterprise counterparty is too much, sentenced of false VAT invoices may lead to implicate enterprises too wide, so some cases changed the Offense of false VAT invoices to the crime of illegal sale of VAT invoices, but this practice in practice did not achieve the expected results, the invoiced enterprise inputs and costs of the problem is not solved. For example, after the judgment of the second trial of Zhejiang Shen's provincial logistics case, a large number of invoiced enterprises were still required by the tax authorities to adjust the input items and pay back taxes. Some tax authorities believed that no matter what crime the upstream enterprises were convicted of, the court rulings showed that the invoices obtained by them did not correspond to the actual business operations, which did not affect the characterization of the false invoicing for tax purposes, while others believed that no matter how the court ruled, as long as the upstream tax authorities had no change in the characterization of false invoicing for upstream enterprises There are also some tax authorities who believe that regardless of the court's judgment, as long as the upstream tax authority's characterization of false invoicing of the upstream enterprise remains unchanged, it is still false invoicing and the provisions on false invoicing at the level of administrative law are applicable. In this way, regardless of whether the upstream invoicing enterprise is convicted and punished for the Offense of false VAT invoicing or illegal sale of VAT invoices, the downstream enterprise faces the problem of input reversal and adjustment of income tax.

Further, the practice of commutation may trigger counterproductive effects. As mentioned above, platform enterprises can easily be characterized as “shell enterprises” and “all comers”, and are included in the Offense of illegal sale of VAT invoices, which has a lower threshold of incrimination, making the downstream enterprises even more susceptible to being implicated. In some cases, the invoices issued by upstream enterprises convicted of false VAT invoicing were all recognized as false invoices across the board, and downstream enterprises with real business could not deduct the inputs after paying the tax-inclusive price to the platform enterprise and incurring costs, and faced the double taxation pressure of value-added tax (VAT) and enterprise income tax (EIT), which posed a challenge to the cash flow of the enterprises.

V. Conclusion: The act of opening and reissuing invoices on behalf of the real business does not constitute the Offense of false VAT invoicing or illegal sale of VAT invoices.

This paper holds that, in the case of real business, the platform enterprise as the invoicing party does not have the purpose of fraudulently offsetting the national tax, does not cause the loss of national tax, and only implements the behavior of reissuing and invoicing on behalf of the state, which should not be punished for the Offense of false VAT invoicing, and even more should not be punished for the Offense of illegal sale of VAT invoices:

As far as the Offense of false VAT invoicing is concerned, although the platform enterprise may have some irregular operations, as long as these acts are based on real business, i.e., the payment of funds is real, and the correct payment of VAT is ultimately ensured without causing actual loss of state tax, then it does not constitute the Offense of false VAT invoicing.

As far as the Offense of illegal sale of VAT invoices is concerned, on the one hand, the aforesaid situation is not the sale of blank invoices, which is inconsistent with the legislative intent of the Offense of illegal sale of VAT invoices; on the other hand, such connotation modification has unduly expanded the legal provisions, which has allowed the authorities to evade the obligation of proving that the “purpose of cheating against the state tax” has caused the “fraudulent loss of the state tax”. The case-handling authorities avoided the obligation to prove the “purpose of fraudulent offset of VAT invoices” and dealt with cases that could not be investigated as Offense of illegal sale of VAT invoices, thus destroying the original criminal law system. Even if the Understanding and Application of VAT invoices to carry out the innovation of the legislative connotation, should also be limited to the Offense of illegal sale of VAT invoices, should not be expanded to the real business on behalf of the opening, reopening behavior.

In this paper, the social harm of the real behavior is light, and part of the reality of industry practice, the administrative responsibility of the invoicing party can be investigated. If you do want to pursue criminal liability, should also be in accordance with the crime of false invoicing to pursue. First of all, from the offense of illegal sale of VAT invoices, compared with the behavior, the real opening behavior is more in line with the characteristics of false invoicing; Secondly, the crime of false invoicing itself is to make up for the crime of false invoices is difficult to regulate the behavior of false invoicing and the patch, the real opening behavior is not abusing the right of VAT invoices, and did not cause the loss of national taxes, in the case of not in line with the Offense of false sale of VAT invoices, the crime of false invoices should be in the scope of the regulation of the crime of false invoicing, the crime of false invoicing, the crime of false invoicing. It is in line with the legislative intent of the crime of false invoicing and also maintains the rigor of the criminal law system.

With the increasingly strict crackdown on false invoicing, platform enterprises have become the focus of supervision, and many places have broken out with large false invoicing cases of platform enterprises. The majority of platform enterprises should do their due diligence in auditing and supervision, strengthen compliance construction, pay attention to evidence retention, and fully argue that their business is real and fulfill their supervision obligations when they are subject to tax audits. In the face of some new judicial trends and possible elevated risks in practice, platform enterprises can promptly communicate with professionals and hire lawyers to intervene in a timely manner, so as to reasonably defend against the allegations, prevent the escalation of risks and protect their own rights and interests.