Editor’s Note: Recently, the Shanghai No. 2 Intermediate People’s Court rendered the second-instance criminal judgment No. (2025) Hu 02 Xing Zhong 752, changing the conviction at first instance from the offense of falsely issuing special VAT invoices to the offense of falsely issuing invoices. This case is a typical example in the refined-oil trading sector where false issuance was used to evade consumption tax supervision. On the basis of unchanged fact-finding, the appellate court corrected the application of law. The judgment not only aligns with the narrowing of the criminal scope of the offense of falsely issuing special VAT invoices under the tax-related judicial interpretation issued by the Supreme People’s Court and the Supreme People’s Procuratorate, but also reaffirms an important adjudicative rule: the object of the offense of falsely issuing invoices may include special VAT invoices. Taking this case as an entry point, this article analyzes the legal logic behind the appellate recharacterization and discusses the determination of charges and defense strategies in refined-oil false-issuance cases, with a view to providing practical reference for similar cases.

In March 2024, the Judicial Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate Concerning Criminal Cases Involving Tax-Related Crimes introduced major revisions to the statutory constitutive elements of the crime of defrauding export tax rebates. It consolidated the two categories of false export declarations and other tax fraud conduct into a single enumerated provision, while deleting the wording “for the purpose of fabricating facts of taxable goods being exported” under the clause governing false export declaration tactics. Compared with the previous provisions, this revision has led some case-handling authorities to instinctively presume that any deceptive tactic listed in the dual-high judicial interpretation automatically constitutes the crime of defrauding export tax rebates, sharply elevating criminal risks related to export tax rebate fraud.
According to incomplete statistics, 13 publicly reported cases involving export tax rebate fraud emerged in the first half of 2026 alone, among which six involved low-value goods declared at inflated prices. These cases feature enormous sums involved and severe criminal liabilities. With regard to such cases, the author holds that conduct of declaring low-value goods at inflated prices does not invariably amount to the crime of defrauding export tax rebates. This article briefly analyzes three typical cases of inflated-value declarations for low-value exports, summarizes the common characteristics of such cases, and interprets inflated-value declaration conduct from the fundamental mechanism of export tax rebates for readers’ reference.

Editor's Note: Since the beginning of 2026, tax authorities in various regions have centrally exposed multiple typical tax-related cases in the online online live streaming industry, with tax risks erupting frequently. In June 2025, the Provisions on the Submission of Tax-Related Information by Internet Platform Enterprises took effect, expressly setting forth the obligation of online live streaming platforms to submit tax-related information and signaling a continued tightening of tax supervision in the online live streaming sector. This article reviews cases from recent years and relevant new tax regulations, examines the typical tax risks faced by various participants in the online live streaming industry, and offers tax compliance recommendations for reference.

Editor’s Note: Recently, in its 2025 annual audit work report, the National Audit Office specially disclosed the findings of an audit investigation into the production and distribution of traditional Chinese medicine (TCM), identifying RMB 4.652 billion in problematic amounts. The issues involved inflated procurement costs for Chinese medicinal materials, fabricated selling expenses, “sales with kickbacks,” and the erosion of medical insurance funds, among others. Taking this as the point of entry, and against the backdrop of increasingly strict coordination among tax inspections, healthcare-sector rectification, and anti-commercial-bribery regulation, this article reviews the tax-related risks in the TCM production and distribution chain and the logic behind their formation, and puts forward compliance suggestions for TCM enterprises to prevent and control tax risks.

Recently, numerous customs brokerage firms, freight forwarders and export enterprises have received customs audit notices requiring explanations on the reasons for changing customs declaration entities, disclosure of whether the actual goods owners were concealed, and confirmation of any export declarations without physical goods. Against the backdrop of strengthened cross-departmental joint supervision by customs and tax authorities nationwide, alongside mandatory expansion of information disclosure obligations covering entrusting exporters, customs brokers and other service providers, the room for survival of all non-compliant document purchasing practices from past years has been drastically narrowed. Legal risks for market players including actual goods owners, export enterprises and customs brokers are erupting simultaneously across multiple fronts. In light of this, this article analyzes the distinct legal risks arising from three types of document purchasing activities – general document purchasing for export, document purchasing to defraud export tax rebates, and document purchasing to defraud fiscal subsidies – for readers’ reference.

Editor’s Note:In recent years, China’s coffee industry has been expanding rapidly from traditional cultivation into diversified scenarios such as deep processing, branded retail, cross-border trade, and cultural-tourism integration. As the industry chain continues to lengthen and business models become increasingly complex, tax-related issues such as invoice administration, input VAT credit, and applicable tax rates have also emerged across procurement, processing, sales, import, and export activities. The first batch of typical tax compliance cases for the coffee industry chain, jointly released by the tax authorities of Yunnan, Jiangsu, and Shanghai, signals that the focus of tax administration in the coffee industry is shifting from isolated matters to whole-chain governance. This article examines the business characteristics of different segments of the coffee industry chain, identifies the main tax-related risks that coffee enterprises may face, and offers corresponding tax compliance recommendations for reference.

Editor's Note: On June 18, 2026, a local tax authority served a Notice of Tax Matters by public announcement, determining that the employee stock ownership platform of Ancar Inspection (a listed company) had fraudulently changed its business scope from equity investment to consulting services and had unlawfully applied for the assessed collection method for enterprise income tax (EIT), resulting in approximately RMB 248 million in underpaid EIT. The authority required 47 individual shareholders to bear the additional tax payable and late payment surcharges in proportion to their respective capital contributions. This article uses this case as a starting point to trace the tax planning pathway employed around the lifting of the lock-up on restricted shares held by the employee stock ownership platform. It analyzes the statute of limitations for tax recovery and the strategic risks of raising a limitations defense, the scope for arguments against imposing late payment surcharges, the disputed legal pathways by which tax authorities may pierce the corporate veil and pursue shareholder liability after company deregistration, and the typical tax risk exposures revealed by this case—with the aim of providing reference and cautionary guidance for relevant market participants.

Editor's Note:According to the Notice of the Ministry of Finance and the State Administration of Taxation on Regulating the Administration of Individual Income Tax Collection for Individual Investors (Caishui [2003] No. 158), if an individual shareholder borrows funds from the company they invest in within a tax year and fails to repay the loan or use it for the company's production and operation by the end of that tax year, the outstanding balance may be deemed as dividend distribution from the company to the shareholder. Accordingly, long-overdue loans from a company to its individual shareholders are treated as profit distribution for tax purposes.