Editor's note: In practice, due to the inability of network anchors to issue invoices to network live streaming companies (MCN companies), some MCN companies use consumer recharge information on live streaming platforms to offset the corresponding tax burden costs. Obtain special VAT invoices for the sales of virtual goods and services from the live streaming platform for input deduction. This article will analyze the tax risks and legal responsibilities of MCN companies and live streaming platforms based on specific cases.

 

Ⅰ. Introduction of the case: MCN company used other people's information to obtain false invoices, and was fined more than 10 million yuan

Recently, the Taizhou Municipal Taxation Bureau of the State Administration of Taxation investigated and dealt with a case of a certain MCN company issuing false VAT special invoices. Since the company involved in the case could not obtain input invoices after paying funds to the company's anchor, the company involved in the case of deducting input invoices without actual business dealings with Douyin and Huya companies, Using information obtained from other individuals on Douyin and Huya, applying for invoices from Douyin and Huya companies. The company involved in the case obtained more than a hundred false VAT special invoices through this method, and used some of the false invoices to offset VAT and pre-tax expenses, resulting in a total of more than 10 million yuan in taxes and fines being recovered.

In this case, do the online live streaming platforms such as Douyin and Huya, as the invoicing parties, constitute the crime of issuing false VAT special invoices? Does the MCN company, as the recipient of the invoice, constitute the crime of issuing false VAT special invoices or illegally purchasing VAT special invoices? And how should the issuer and the recipient bear administrative responsibilities? A detailed analysis will be provided below.

 

II. Whether the online live broadcast platform as the invoicing party constitutes the crime of issuing false VAT special invoices

(I) The invoicing party meets the requirements of fictitious transaction entity type

According to Article 21 of the "Interim Regulations on Value-Added Tax," if goods or taxable services are sold to consumers, special VAT invoices shall not be issued, and only ordinary VAT invoices can be issued. In this case, the online live streaming platform selling virtual goods and services to individual consumers is a business that cannot issue special VAT invoices or deduct taxes according to law.

According to Article 10, Paragraph 3 of the "Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Harmful Tax Collection and Management", "For business that cannot be deducted according to law, "Issuing value-added tax special invoices through fictitious transaction entities, other invoices used to obtain export tax refunds or deduct taxes, constitutes the act of issuing false value-added tax special invoices. In addition, the Supreme People's Procuratorate's interpretation of the aforementioned judicial interpretation pointed out that "the third item refers to the suggestions of the Ministry of Public Security and the State Administration of Taxation, and the actual transaction recipient does not meet the deduction conditions. However, using a fictitious third party unrelated to the transaction to obtain the invoice and deduct it is also considered a false invoicing behavior." In this case, MCN Company impersonated individual consumer recharge information, which is a fictitious recharge transaction entity, obtaining VAT special invoices for deduction from the online live streaming platform, which is a business that does not meet the deduction conditions, and obtaining invoices for deduction by fabricating a third-party entity unrelated to the transaction. It constitutes the "fictional transaction subject type false opening" as stipulated in the judicial interpretation. Therefore, platforms such as Douyin and Huya, as the invoicing party, meet the requirements for issuing false VAT special invoices with fictitious transaction entities.

The reason for the criminalization of "fictional transaction entity type false opening" is that it improperly extends the value-added tax deduction chain. From the perspective of tax law principles, value-added tax is a tax levied on the value-added value of goods and services. To achieve this tax purpose, the country has designed a chain tax system of deductions through the deduction of goods and services. Ensure that the tax paid by taxpayers in each link is consistent with the tax obligations that should be borne by the value-added amount in that link. The chain of goods and services from production, trade to consumption is not infinitely long. For each taxable object, the total value-added tax levied at each transaction link is calculated by deducting the cost of raw materials in the production link from the sales volume in the consumption link, i.e., the total value-added tax. It should be exactly equal to the tax liability corresponding to the overall value-added. The value-added tax deduction chain of a taxable object must be terminated at the consumption stage in order to realize the full amount of value-added tax that the taxable object should bear. If the deduction chain continues to be extended by fictitious transaction entities in the consumption process, it will cause the input tax deduction chain that should have been terminated to be restarted and used to deduct the output tax of another taxable object, resulting in a reduction in the value-added tax obligation of the other taxable object. thereby reducing the national value-added tax benefits.

(Ⅱ) Whether the issuer has the subjective intention of falsely issuing the bill determines whether it constitutes the crime of falsely issuing the bill

The principle of consistency between subject and object is the basic principle of criminal law, which requires that only the perpetrator has subjective understanding of a certain crime and has carried out objective behavior that conforms to the constitution of the crime under the control of this understanding, can the perpetrator be deemed to have constituted the crime. If the perpetrator engages in objective acts that conform to the constitution of a certain crime, but does not have a subjective understanding of the crime (such as an accident), it does not constitute the crime. To constitute the crime of issuing false VAT special invoices, the perpetrator is required to have a subjective understanding of the false issuance, and this understanding should be manifested as intentional, excluding negligence.

In this case, the invoicing party's online live streaming platform issued value-added tax special invoices to MCN Company without any real business, and implemented the act of issuing false value-added tax special invoices. However, does it constitute the crime of issuing false value-added tax special invoices? It is also necessary to consider whether there is subjective intention of false issuance, that is, whether the online live streaming platform knows or allows the invoice recipient to be inconsistent with the purchaser, and still issues value-added tax special invoices. Specifically:

1. If there is collusion between the online live streaming platform and the MCN company, issuing invoices to them without knowing that there is no real business, there is direct intention.

2. Although there is no collusion between the online live streaming platform and the MCN company, if the online live streaming platform has a legal and clear obligation to review invoices, issuing invoices to the MCN company without fulfilling the audit obligation may also be considered as laissez-faire invoicing. i.e., there is indirect intent;

3. If there is no collusion between the online live streaming platform and the MCN company, and there is no statutory or clear obligation to review invoices, the issuance of invoices to the MCN company can only be classified as negligence or accidental events, and there is no intentional behavior.

According to the "Invoice Management Measures" and other regulations, the invoicing party has a basic obligation to review the "three-stream consistency". Therefore, it is necessary to consider whether the online live streaming platform intentionally issued false invoices based on the specific invoicing mode of this case. Specifically:

1. If consumers make payments to the platform through their personal accounts, the platform does not issue invoices or account for them, resulting in surplus invoices. Afterwards, the MCN company purchases invoices from the platform by paying the invoicing fee, resulting in obvious separation of invoices and funds inflow. It can be directly determined that the platform has a direct intention to open falsely;

2 1. If the consumer pays and recharges to the platform through the personal account, the platform records and calculates the income, and intends to declare or has declared the income without invoice, MCN company uses the personal recharge information to request the invoice from the platform, and the platform directly issues the invoice to MCN company, although there is no fund return. However, if there is obvious separation of tickets and goods, it should at least be considered that the platform has an indirect intention of laissez-faire. However, if the MCN company can provide an entrusted payment agreement, and the platform fulfills certain audit obligations, and there is no other evidence to prove that the platform is aware of false issuance, it should not be considered that the platform has intention.

3 2. If MCN Company directly reaches an agreement with individual consumers, the individual consumers first pay and recharge to MCN Company, and then MCN Company pays and recharges to the platform in its own name to obtain invoices, MCN Company forms a recharge channel and requires the platform to recognize that there is no possibility of MCN Company obtaining invoices. The platform should be directly considered as not intentional.

Ⅲ. Does the MCN company, as the payee, constitute a crime? What kind of crime?

(Ⅰ) Does the MCN company, as the recipient of the invoice, constitute the crime of illegally purchasing value-added tax special invoices?

In the "Interpretation and Application of the "Interpretation of Several Issues Concerning the Application of Laws in Handling Criminal Cases that Harm Tax Collection and Administration" of the Supreme People's Court, judges pointed out that "invoicing special invoices for value-added tax are often issued by the recipient under the guise of paying'invoicing fees' and'tax points'." After obtaining input invoices from others and deducting them, the relationship between the issuing party and the recipient of the invoice also forms an illegal sale and illegal purchase of value-added tax special invoices... If the recipient illegally purchases value-added tax special invoices, it is not used for tax fraud, but for other purposes. If other purposes do not constitute a crime, it constitutes the crime of illegally purchasing value-added tax special invoices; If other purposes constitute other crimes, it constitutes the crime of illegal purchase of value-added tax special invoices and other purposes.

In this case, regardless of the aforementioned invoicing mode used by MCN Company to obtain invoices from the online live streaming platform, it usually requires a certain cost. In the first mode, invoicing fees need to be paid to the platform. In the second mode, you need to pay for the recharge record. In the third model, a recharge channel discount needs to be provided to attract consumers to use the channel for recharge. The above-mentioned costs borne by MCN Company are all expenses for obtaining invoices, which can be understood as the cost of purchasing invoices. Moreover, the actions carried out by MCN Company at least infringe on the order of invoice management, which can be considered as illegal purchase of invoices and meet the criteria for criminalization. It should be recognized as the crime of illegal purchase of value-added tax special invoices.

(Ⅱ) Does the MCN company, as the recipient of the invoice, constitute the crime of issuing false VAT special invoices?

As mentioned earlier, on the basis of illegal purchases, MCN company's behavior also constitutes "fictional transaction subject type false opening", which meets the criminal constitution of false opening. Whether it constitutes a false opening crime depends on whether MCN company can apply the criminal provisions of false opening. That is, whether the MCN company has the purpose of deceiving value-added tax, and whether it causes value-added tax fraud losses due to deduction.

In this case, MCN Company did indeed pay compensation to the online anchor, and there was a real business relationship with the anchor, and the nature of this business determined the criminal nature of this case. Specifically:

1 If a statutory employment relationship is formed between MCN companies and online anchors, according to the provisions of tax laws, providing labor to the employer does not constitute a taxable act of value-added tax, and cannot issue special value-added tax invoices according to the law. The employer also has no substantial deduction rights. In this case, if the MCN company obtains false invoices to offset tax, it can be directly determined as having the purpose of fraudulently offsetting value-added tax, and this behavior causes value-added tax losses, it can be legally determined as an accomplice of illegal purchase and false issuance, and punished as a crime of false issuance;

2 If a labor service relationship is formed between MCN company and network anchor, and the network anchor provides labor services in the name of an individual, according to the provisions of the tax law, individuals providing labor services cannot issue special value-added tax invoices. This situation also does not meet the conditions for issuing special value-added tax invoices to the tax authorities. MCN Company has no substantial deduction rights. This situation can refer to the above situation for qualitative treatment;

3 If a labor service relationship is formed between an MCN company and a network anchor, and the network anchor provides labor services in the form of an individual operator, sole proprietor, partnership, or company, according to the provisions of the tax law, individual operators, sole proprietors, partnerships, and companies can all issue special VAT invoices. In this case, if the anchor does not issue an invoice and the MCN company obtains an invoice from the platform, regardless of the use of fictitious transaction entities or other means, this invoicing behavior can be independently recognized as proxy invoicing behavior. According to the provisions of judicial interpretations, proxy invoicing behavior can be considered. It should not be recognized as false issuance. For example, if the tax amount of the invoice issued by the agent does not exceed the scope of the tax liability of the MCN company, it should not be recognized as a crime of false issuance. It can be recognized as tax evasion, and the administrative provisions of tax evasion shall apply. If MCN Company pays the full amount of taxes, late fees, and fines, it shall be punished as the crime of illegally purchasing VAT special invoices.

 

IV. The administrative responsibility analysis of the network live broadcast platform and MCN company in this case

(Ⅰ) Can the online live streaming platform, as the invoicing party, be punished if there is no intention of false invoicing, but it implements false invoicing behavior?

The "Administrative Penalty Law" follows the basic principle of equal punishment, and also requires the offender to have fault for the illegal act, which generally manifests as intentional and gross negligence. If it cannot be determined that the live streaming platform has intentional and gross negligence, it is not appropriate to impose administrative penalties. It should be emphasized that according to Article 33 of the revised "Administrative Penalty Law" in 2021, "If the party has evidence sufficient to prove that there is no subjective fault, no administrative penalty shall be imposed." If there are other provisions in laws and administrative regulations, some believe that this provision essentially reverses the burden of proof. The administrative agency only needs to prove that the parties involved have committed illegal acts, and the parties involved need to prove that they have no subjective fault. We believe that this view is biased. This provision is intended to provide a remedy path for the parties to obstruct the liability for punishment, but it does not mean that the administrative organ does not need to bear the burden of proof of subjective fault when making punishment. Tax law enforcement should follow the basic principle of the presumption of no fault for taxpayers. In the case where the tax authorities have no evidence to prove the subjective intent of the parties involved in false invoicing, it cannot be presumed that the taxpayer has the intention of false invoicing. In the second and third invoicing modes, If there is insufficient evidence to prove the subjective intention of the online live streaming platform to issue false invoices, it cannot be punished solely for the existence of false invoices.

(Ⅱ) How should the MCN company, as the recipient of the invoice, be punished for obtaining false invoices?

First, MCN Company has no actual business with the online live streaming platform and uses other people's information to obtain invoices from the online live streaming platform, which constitutes the act of issuing false invoices under Article 21 of the "Invoice Management Measures" that "let others issue invoices that do not match the actual business operations." There is obvious subjective intent to issue false invoices. For the act of issuing false invoices, according to Article 35 of the "Invoice Management Measures", a maximum fine of 500,000 yuan can be imposed.

Second, MCN Company deducts input tax by obtaining false invoices, which constitutes "false tax declaration" under Article 63 of the Tax Collection and Administration Law and the "Notice of the State Administration of Taxation on the Handling of Taxpayers Obtaining False Value-added Tax Special Invoices" (State Taxation Bureau [1997] Tax evasion as stipulated in No. 134). At the same time, MCN knew that it had no actual business with the online live streaming platform, and used other people's information to apply for invoice deduction from the online live streaming platform, which had the subjective intent of tax evasion and had sufficient evidence to prove it, resulting in the objective result of underpayment of taxes. If the constituent elements of tax evasion are met, a fine of 0.5 to 5 times the underpayment of tax may be imposed.

In conclusion, MCN Company's behavior of obtaining false invoices not only violates the provisions of the "Invoice Management Measures" but also the provisions of the "Tax Collection and Administration Law". It is a situation where the same violation violates multiple legal norms. According to Article 29 of the "Administrative Penalty Law", The penalty shall be imposed in accordance with the provisions of the higher amount of the fine.