Recently, Liu Tianyong, the director of Hwuason, was interviewed by LexisNexis in its annual interview, reviewing the year 2023 in the field of finance and taxation and making an outlook for the year 2024. According to Mr. Liu, the year 2023 has seen continuous development and many achievements, whether in terms of improvement of tax legislation, reform of tax collection and administration system, construction of smart tax, or deepening of tax service market. Facing the coming 2024, he believes that compliance is increasingly becoming an indispensable part of enterprise development, and the market and regulatory bodies are increasingly demanding tax compliance from enterprises, which also poses new challenges for tax lawyers, and he predicts that tax compliance will become a new hotspot and trend.

LexisNexis is the world's leading provider of legal and business information. LexisNexis provides comprehensive and authoritative information services to legal organizations, corporations, government and academia, and regularly publishes legal, news, business and tax-related materials based on a combination of superior sources of information, advanced web technologies and proprietary branding resources. Serving more than 100 countries,LexisNexis  entered China in 1994. As a "Distinguished Author of LexisNexis ", Hwuason and LexisNexis have maintained a good content cooperation relationship for a long time, and collaborate to provide high-quality original information services on finance and tax law for Chinese enterprises. The details of the interview are as follows:

The year 2023 is a year of great significance in the development process of the tax field. In this year, China's tax system will be further improved, tax policy adjustments will be optimized, tax collection and management innovations will continue to be promoted, and tax cooperation and international exchanges will become closer.

On the occasion of the New Year's Eve and the New Year's Eve,LexisNexis invited three tax law experts, including Mr. Liu Tianyong of Hwuason Law Firm, to express their observations on the tax law field in 2023, and to share with you the professional trends in 2024 as well as their expectations for the future.

LexisNexis: If you were asked to describe the past 2023 in one sentence or one word how would you describe it?

Liu Tianyong:The year 2023 was the opening year of the comprehensive implementation of the spirit of the 20th Party Congress, and many landmark events took place in the field of taxation in this year. If I have to use one word to describe it, I think it is "development" or "upgrading". 2023 was a year of continuous development and achievements in the improvement of tax legislation, reform of the tax administration system, construction of smart tax, and deepening of the tax service market. Many achievements have been made, and the tax department and the majority of tax-related service providers are working hard to realize the transformation from 'tax management by votes' to 'tax management by numbers' and 'classification and precise supervision' by 2023, as put forward by the Central and State Offices of the People's Republic of China in the Opinions on Further Deepening the Reform of Taxation Levy and Administration. ' classification and precise supervision", which is the goal of the Opinions on Further Deepening Tax Collection and Management Reform issued by the State Council.

LexisNexis: And which tax hotspot are you more impressed with for 2023?

Liu Tianyong:Personally, I am rather impressed by the fact that the Value-added Tax Law (Draft) has passed the second instance. VAT is the largest tax in China, and the improvement of its legal system means a big step forward in the implementation of the principle of statutory taxation. China's value-added tax law has experienced a "progressive" road of gradual reform and improvement. From the beginning of the tax reform in 1994, when the production-based value-added tax was introduced, to the full implementation of the business tax to value-added tax in 2016, and then to the large-scale policy of tax credit and tax rebate, it can be seen that China's legal system of value-added tax is being gradually perfected, and the policy of reducing taxes and fees can be implemented, and the image of ruling taxes in accordance with the law can be realized. can be implemented, and the image of tax administration in accordance with the law has been further enhanced.

On the premise of keeping the current tax framework and tax burden level basically unchanged, the Second Review Draft of the Value-added Tax Law (Draft) gives more prominence to the people-centered tax policy orientation, increases the support for small, medium-sized and micro-enterprises, clarifies the system of input tax credit and tax rebate, and strengthens the sharing of departmental information, which will help to build up a fair and transparent tax environment and give more benefits to taxpayers. This is not only an improvement of China's tax system, but also an important adjustment to adapt to the economic situation of the new era and the trend of international tax governance. With the gradual improvement of the legal system for various taxes, China's tax system will become more scientific and rational, providing stronger support for the sustainable development of the economy and society.

LexisNexis: Looking ahead to the upcoming year 2024, how do you see the tax world evolving? And what are your expectations for 2024?

Liu Tianyong: Based on the current situation of the tax field in 2023, I predict that tax compliance will become a new hot spot and trend. In recent years, compliance has increasingly become an indispensable part of business development, and the market and regulatory bodies have increasingly demanded tax compliance from enterprises. We have seen that this year, the General Administration of Taxation has exposed another batch of typical cases of tax-related crimes, the People's Court has joined the regularized joint mechanism to combat tax fraud, and the seven departments have been cooperating with each other to realize the linkage of the whole process, from administrative law enforcement to court adjudication. Meanwhile, a number of proposed IPO enterprises interrupted the listing process due to tax-related problems, causing losses to investors. It is not difficult to notice that the digital upgrading of tax regulation has put forward higher compliance requirements for the majority of taxpayers and new challenges for us tax lawyers. That's why I believe compliance will definitely be the mainstream in the future.

The year 2024 is also the penultimate year of the 14th Five-Year Plan and the 75th anniversary of the founding of New China, and my greatest expectation is the further implementation of the comprehensive tax legislation. Since the Third Plenary Session of the 18th Party Congress in 2013 put forward the implementation of the principle of statutory taxation, China has carried out large-scale tax legislation and the legislative process of various taxes has accelerated. In 2023, we welcomed the second review of the Value-Added Tax Law (Draft), and it is expected that the official bill will be passed next year. Meanwhile, we also expect taxes that have yet to realize legislation to have a breakthrough in the new year, especially the widely anticipated consumption tax and customs duty. In addition, the Tax Collection and Administration Law has not been able to formally initiate the amendment process since the draft was put out for comments in 2015, and we also hope that some of the institutional measures in the draft collection and administration law that will benefit taxpayers will be realized as soon as possible.

Meanwhile, I have also been thinking about the issue of the direction of development and change in the business area. As I have just mentioned, tax compliance profoundly affects the decision-making, operation and development of enterprises, and will be bursting with strong market demand. Tax compliance can be broadly categorized into administrative and criminal compliance. As tax lawyers, since 2020, we have been mainly involved in criminal compliance reforms for enterprises involved in criminal cases, saving a number of enterprises involved in tax-related crimes. Currently, as enterprises' attention to tax-related risks gradually extends from after-the-fact relief to before-the-fact prevention, they are increasingly concerned about tax administrative compliance. In this regard, we will provide enterprises with all-round and full-spectrum tax compliance services from the perspective of the continuity and wholeness of their operations, so as to ensure that the lifecycle of enterprises from establishment, operation to liquidation and write-off complies with tax laws and regulations as well as relevant policies, and to reduce the tax-related risks. Of course, we will also continue to pay attention to and devote ourselves to tax-related administrative and criminal dispute resolution, provide high-quality legal relief services for taxpayers, and realize a full range of professional tax-related services from front-end compliance to risk response.