Editor's Note: Since the implementation of the judicial interpretation on tax-related crimes by the Supreme People's Court and the Supreme People's Procuratorate (hereinafter referred to as the "Two Supreme Judicial Interpretation"), the judicial adjudication pattern of tax-related criminal cases has undergone adjustments due to the narrowing of the scope of the crime of falsely issuing special VAT invoices by this interpretation, and the trend of charge diversion has become increasingly significant. Based on the public judgment document data from the implementation of the interpretation to the end of 2025, combined with typical cases of the Supreme People's Court, judge training materials, Criminal Trial Reference and defense practice experience, this article sorts out and analyzes the latest adjudication trends of the crime of tax evasion in current judicial practice, and summarizes the key points of targeted defense strategies, aiming to provide practical reference.

Editor's Note

The crime of falsely issuing invoices, added by the Criminal Law Amendment (VIII), has long been regarded as mainly applicable to the evaluation of acts such as falsely issuing Value-Added Tax (VAT) ordinary invoices and other invoices without tax deduction function. This offense is classified as a conduct crime, meaning criminal liability can be pursued once the statutory incrimination threshold is met, and this issue was basically uncontroversial in the past.

Following the issuance of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Endangering Tax Collection and Administration (Fa Shi [2024] No. 4), in numerous cases involving the obtaining of falsely issued special VAT invoices, where the fraudulently inflated input VAT does not exceed the scope of the taxpayer's taxable liability, the act is determined to lack the intent to fraudulently offset tax, and is categorized as a tax evasion act of "falsely offsetting input VAT". Such acts are eligible for the application of the administrative prepositive procedure, and no criminal liability will be pursued after the fulfillment of administrative liabilities, including paying back underpaid taxes, late payment surcharges and administrative fines.

This has created a notable split in the criminal liability assessment between the false issuance of special VAT invoices and ordinary VAT invoices: the former, which usually entails greater social harmfulness, can be conditionally exempted from criminal liability through fulfilling administrative liabilities; while the latter, which usually has lesser social harmfulness, may still result in a conviction even if the administrative liabilities are fully fulfilled. How to coordinate and resolve this contradiction? The author attempts to conduct an analysis using the method of natural interpretation for readers' reference.

Editor’s Note: According to data from the Ministry of Commerce, more than 70,000 new foreign-invested enterprises were established in China in 2025, representing a year-on-year increase of 19.1%. The continuous increase in foreign investment in China is largely attributable to supportive tax policies. Since 2017, China has established a deferred tax regime for overseas investors making direct investments with distributed profits. *The Notice on Expanding the Scope of the Policy of Temporary Exemption from Withholding Income Tax on Direct Reinvestment by Overseas Investors with Distributed Profits* (Cai Shui [2018] No. 102) extended the application of tax deferral from encouraged foreign investment projects to all non-prohibited foreign investment projects and sectors. *The Announcement on Tax Credit Policies for Direct Reinvestment by Overseas Investors Using Distributed Profits* (Announcement No. 2 of 2025 jointly issued by the Ministry of Finance, the State Taxation Administration and the Ministry of Commerce), released last year, further added tax credit incentives on the basis of the deferred tax system. This marks a leap forward in tax policies for foreign investors' reinvestment, evolving from "tax deferral" to "tax reduction", which is of great significance for easing the burden on foreign investors, improving operational quality and efficiency, and boosting their investment enthusiasm. Based on two cases of supplementary tax payment arising from overseas investors' reinvestment, this paper explores the core application requirements of the deferred tax policy, interprets the key points of the new tax credit policy, and provides practical references for overseas investors to enjoy tax incentives in a compliant manner.

Editor’s Note: Recently, Criminal Trial Reference (Total Issue 147), compiled by the Criminal Tribunal of the Supreme People’s Court (SPC), has been officially published and distributed by the People’s Court Press. Case No. 1668 People v. Pan Moumou et al. (Tax Evasion) included in this book is a typical case of tax evasion through false invoicing and invoice alteration by petrochemical companies. The book clearly states that altering the product names on input and output invoices through false issuance to evade consumption tax in the production link does not constitute the crime of falsely issuing special VAT invoices, and shall be punished as the crime of tax evasion.

Editor’s Note: In December 2025, among the three tax-related illegal cases of platform enterprises publicly exposed in a concentrated manner by the State Taxation Administration, the case of fraudulent issuance of special value-added tax (VAT) invoices by Shaanxi YunMendi Company attracted widespread attention. The limited information disclosed by the authorities outlines the characteristics of false invoicing by shell companies. However, for a platform enterprise that had legally obtained the online freight qualification, whether its operation was completely divorced from real business remains to be carefully examined.At a time when the judicial interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate (the “Two Supreme Courts”) have narrowed the scope of the crime of false invoicing and emphasized the principle of the unity of subjectivity and objectivity, the judicial characterization of the YunMendi case will not only determine the fate of the involved enterprise and hundreds of downstream invoice-receiving enterprises, but also exert a profound impact on the development of the online freight industry. This article calls for a rational view of the “invoice economy”, advocates prudent distinction between real business and illegal operations, and leaves sufficient room for the standardized development of emerging business formats.

Editor's Note
In the article Legal Consequences of Non-compliant Document Filing and Recordation Under the New Export Tax Refund (Exemption) Rules, we analyzed issues related to document filing and recordation in conjunction with the new regulations. This article traces the origin of the provisions governing "fake self-operation with genuine agency" by referencing the judicial interpretation on tax-related crimes issued by the Supreme People's Court and the Supreme People's Procuratorate (hereinafter referred to as the "Two Highs"), the Implementation Regulations of the Value-Added Tax Law, and the enterprise income tax (EIT) filing rules. It further analyzes the impacts of the new regulations on this practice for readers' reference.

Editor's Note: Two years have passed since the release of the Interpretation of the Supreme People's Court and the Supreme People's Procuratoracy on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Tax Collection and Administration (Fa Shi [2024] No. 4). During these two years, the Supreme People's Court has updated the National Unified Training Textbook for Judges, published typical cases on punishing crimes endangering tax collection and administration, issued a Reply to suggestions from People's Congress deputies regarding clarifying the nature of the act of "falsely crediting input tax" with falsely issued special VAT invoices, and judges from the Fourth Criminal Division have written the Understanding and Application of the new judicial interpretation. Judicial authorities nationwide, during investigation, prosecution, and trial stages, have fully implemented the spirit of the new judicial interpretation, shifting the conviction standards for crimes endangering tax collection and administration. Notably, they have fully clarified the boundary between the crime of falsely issuing special VAT invoices and the crime of tax evasion, forming an intertwined system of top-level legislative design, academic theory, and judicial practice for distinguishing criminality from non-criminality and one crime from another. This has played a significant role in safeguarding the application of the principle of suiting punishment to crime and protecting the development of private enterprises. The author attempts to summarize the relationship and boundary between the crime of falsely issuing special VAT invoices, the crime of tax evasion, and the crime of falsely issuing ordinary invoices for readers' reference.

Editor’s Note: On March 5, Premier Li Qiang of the State Council delivered the Government Work Report at the Fourth Session of the 14th National People’s Congress. Regarding the continued deepening of reforms in key areas, the report outlined multiple tasks for fiscal and tax system reform. Among them, three core tax-related priorities—regulating tax-related behaviors in investment promotion, improving the local tax system, and advancing consumption tax reform—both align with past regulatory orientations and clarify the direction of tax collection, administration, and reform for 2026. These priorities carry strong guiding significance for the tax-related practices of local governments and market entities. This article interprets the three tax-related priorities by combining policy backgrounds and regulatory developments, providing practical guidance for enterprises to respond.