The false acceptance of live platform invoices and foreign false openings were investigated, inventory of tax-related risks in the live broadcasting industry
In July this year, Fuzhou Municipal Tax Bureau served a Decision on Tax Treatment by way of announcement. The tax authorities determined that the company involved in the case obtained invoices from a company in Beijing to inflate the cost, and then violently invoiced to the outside world within a short period of time, and characterized the invoices issued by the company involved in the case as false invoicing. With the development of the Internet, the network live broadcasting industry has emerged, but some live broadcasting platforms, network anchors, MCN organizations and other subjects have not paid sufficient attention to tax compliance in the operation and development, resulting in a surge of tax-related risks. In view of this, this article takes the case as a starting point to analyze the tax-related risks of all parties in the live broadcast industry and puts forward tax compliance suggestions for readers' reference.
I. Introduction of the case: the risk of false invoicing in the live broadcasting industry has emerged
(I) The consulting company was investigated for taking invoices from live broadcasting platforms and making false invoices to the outside world.
In this case, the tax authorities found that the company in question had no production and business address, no rent, utilities, employee wages and other operating expenditures, no social security declaration records, and was a shell company. However, the company in question obtained invoices from a Beijing company totaling up to 19 million yuan in price and tax, and did not make any payment to the Beijing company, which is obviously abnormal. After sending a letter to the competent tax authority of the Beijing company, it was confirmed that the Beijing company was a live broadcasting platform that sold virtual currency "Shake Coins" to the audience, which could be used to purchase virtual gifts from the platform to reward the anchors. During the period in question, the company in question recharged 19 million yuan of Jitterbucks through several Jitterbug accounts. Although the tax documents did not further explain whether the relevant Jitterbit accounts were under the real control of the company and the actual use of the Jitterbit recharged by the company, the processing decision directly characterized the invoices obtained by the company as misrepresentation of costs, which clearly indicated that the tax authorities had obtained certain evidence to prove that the business of recharging the Jitterbit recharged by the company did not have authenticity. In practice, the company involved may obtain the invoice of the live broadcasting platform through the following ways:
1.misrepresenting the affiliation with the Jitterbug account and deceiving the live broadcasting platform to issue invoices
The involved company may provide false information to the live broadcast platform, falsely claiming that the Jitter account on which the recharge behavior occurred was under its actual control, and requesting the live broadcast platform to issue invoices to it, and the live broadcast platform, in the absence of strict scrutiny, mistakenly believed that the relevant account was the involved company's account, and issued invoices to it.
2. false preferential recharge channel, soliciting consumers to recharge in the name of the involved company
The company may provide consumers with preferential recharge channel, consumers have the willingness to recharge, the first payment to the account controlled by the company involved, the company involved in its name to the live platform payment, misleading the live platform that the payment of the company involved in the recharge, and invoicing to the company involved.
3. and live platform "conspiracy" false invoicing
In some cases, the live platform to obtain the local financial rebate policy, can realize the "low-cost" invoicing, live platform and the company involved in the conspiracy to fictional business, the live platform to the company involved in the invoicing, and the use of live platform commodities, virtual, intangible, to increase the authenticity of the transaction of the tax authorities on the verification of the difficulty.
If the company involved in the case continues to make profit from external false invoicing after extracting invoices, it will further increase the risk of tax-related risks. Once the company involved in the case is investigated, it is highly likely that the tax authorities in charge of the upstream live broadcasting platform will coordinate the investigation. For the first and second scenarios, the live broadcasting platform may actively claim that there is no intentional false invoicing due to deception and fraud. For the third scenario, the live broadcast platform also constitutes a false opening offense, and may even be suspected of the crime of false opening.
(II) MCN organizations, in order to incubate anchors, obtain false invoices to obtain funds to brush the volume of rewards
In recent years, in practice, there are still some MCN agencies obtaining false invoices for illegal behavior. Many MCN agencies in order to incubate its network anchor, will register a large number of personal accounts, in the live platform recharge to buy virtual props to reward the anchor, increase the heat, attract traffic. Due to some live platform requirements account can only be tied to personal account recharge, MCN agencies can not buy props through the way of public money, the need to first cash funds, deposited into its control of the personal account, and then used for reward.
Due to the need for a reasonable name to withdraw cash from the public account, some MCN organizations choose to let other enterprises to develop invoices for themselves, such as invoices for consulting fees, and then in the name of employee reimbursement, the reward funds out of the money, paid to the account under their control. In this way, there is a risk of false invoicing when MCN organizations obtain input invoices without actually receiving services such as consulting.
In addition to the above risk of false invoicing, there have also been a number of cases of tax evasion by anchors that have broken out, damaging the interests of national taxes. As a new industry, webcasting industry, in recent years, the state departments have issued policies to strengthen the supervision of webcasting industry, and all parties should improve their tax compliance and take the initiative to prevent tax risks. Next, the author will briefly analyze the tax risks that may be involved in the webcast industry.
II.the tax-related risks of all parties involved in the live network industry and their responsibilities
According to the provisions of the Administrative Measures for Live Webcast Marketing (for Trial Implementation), the main bodies involved in live webcasting are divided into four categories, namely, live broadcasting marketing platforms, live broadcasting room operators, live broadcasting marketers, and live broadcasting marketers' service organizations. Live broadcast marketing platform refers to various types of live broadcast platforms that provide live broadcast services in live webcast marketing. Live broadcasting room operators refer to individuals, legal persons and other organizations that register accounts on live broadcasting marketing platforms or open live broadcasting rooms to engage in live broadcasting marketing activities on the Internet through other network services such as self-built websites. Live streaming marketers refer to individuals who carry out marketing directly to the public in live webcast marketing. The author unifies the live room operator and the live streaming marketer as the webcaster. A live streaming marketer service organization refers to a specialized agency that provides planning, operation, brokerage, training, etc. for live streaming marketers engaged in webcast marketing activities, i.e., the MCN agency mentioned above.
(I) Tax-related risks of live broadcasting platforms and their responsibilities
The Opinions on Further Regulating the Profit-making Behavior of Webcasting and Promoting the Healthy Development of the Industry (Taxation General Income Issue  No. 25), Article 4, Paragraph 1, explicitly requires that live broadcasting platforms and live broadcasting service organizations should clearly distinguish and define the sources and nature of various types of income of the webcasting publisher, and fulfill the obligation of withholding and payment of individual income tax according to the law and shall not transfer or evade the obligation of withholding and payment of individual income tax. Therefore, the live broadcasting platform and MCN organization have the legal obligation of withholding and payment.
However, in practice, the relationship between live webcasting, live broadcasting platforms and service agencies is more complex, and there are different relationship modes, such as labor relationship, labor service relationship, individual household/individual alone mode, and brokerage agency mode. Individual income tax stipulates that the income earner is the taxpayer, and the unit or individual that pays the income is the withholding agent. Under the brokerage agency model, both platforms and MCN organizations have to pay the income to the anchor, and the phenomenon of platforms and MCN organizations shirking their withholding responsibilities to each other occurs, resulting in the loss of national tax.
1. Failure to fulfill the obligation of withholding and paying personal income tax of network anchors in accordance with the law
For live broadcasting platforms, the inability to accurately determine the nature of the network anchor's income and the failure to fulfill the obligation to withhold and pay in accordance with the law will lead to the risk of tax penalties. According to Article 69 of the Tax Collection and Management Law, "If the withholding agent should withhold but does not withhold, or should collect but does not collect the tax, the tax authorities shall recover the tax from the taxpayer, and the withholding agent shall be subject to a fine of not less than 50% and not more than three times of the amount of the tax that should be withheld but does not withhold, or that should be collected but does not collect". If the platform adopts deception and concealment means, does not pay or underpayment of withheld and collected taxes, the amount of 100,000 or more, may also face criminal liability for tax evasion.
If the live platform and the live of the two parties to form a labor relationship, the anchor department from the platform to obtain the base salary, bounty and other income should be recognized as wages, salaries income. The platform applies 3%-45% super progressive tax rate to withhold and pay personal income tax for the anchor. In this case, the main tax risk of the platform is whether it withholds personal tax in full for the anchor. If the two sides formed a labor relationship, the anchor as a natural person stationed on the platform to obtain commissions and other income is labor remuneration income, the platform in accordance with the labor remuneration tax withholding and prepayment of personal tax. If the anchor forms a cooperative relationship with the platform in the capacity of a studio or other market entity, the platform does not have the obligation to withhold and pay, but if the nature of the studio or other market entity is denied by the tax authorities, the platform may face the administrative responsibility of withholding.
In addition, according to the provisions of the Administrative Measures for Webcast Marketing (for Trial Implementation), the live broadcasting platform will be blacklisted in addition to being fined if there is any withholding tax, non-payment or underpayment of withholding tax, etc., which will adversely affect the credibility and image of the platform.
2.Sales of virtual props are accounted for under the account of advance receipts and no revenue is recognized
The revenue sources of the platform mainly include advertising fees, member payment revenue, and user reward revenue. Among them, the reward income refers to the users need to recharge the virtual currency to the live platform, and then use the virtual currency to buy virtual gifts to reward the anchor. At this point, there are two behaviors, one is the user recharge to buy virtual currency; the second is to exchange virtual currency for virtual gifts.
The platform believes that in the recharge phase it is only to obtain the advance receipts, the user did not convert the virtual currency into virtual props for consumption, therefore, the user did not consume the amount included in the advance receipts, and then, there is no value-added tax obligations. However, the tax authorities believe that virtual currency is an intangible asset, and the time of its tax obligation arises on the day when the virtual currency is sold and the sales payment is received. Therefore, the platform's undercounting of revenue is characterized as tax evasion and a fine is imposed.
The sale of virtual currency is a very common business for platforms. Platforms should pay attention to this kind of tax risk and clarify the time of occurrence of VAT obligations on sales of virtual currencies in order to prevent being recognized by the tax authorities as tax evasion.
(II) Tax-related risks of network anchors and their responsibilities
1. Income obtained by network anchors without truthful tax declaration and payment of personal tax
As mentioned before, the different underlying legal relationships between webcasters and platforms and MCN organizations may result in different tax items being applied to the income obtained by the webcasters. However, China's individual income tax adopts a tax collection and management model that combines integration and classification, requiring taxpayers who obtain integrated income to make remittance within March 1 to June 30 of the following year in accordance with the law. Therefore, whether it is based on the income generated by the labor relationship or the income generated by the labor relationship, the anchor is required to truthfully declare and pay personal tax.
According to the second paragraph of Article 64 of the Law on Administration of Tax Collection, "If a taxpayer fails to make a tax declaration and fails to pay or underpays the tax due, the tax authorities shall recover the unpaid or underpaid tax, late fees, and impose a fine of not less than 50 percent and not more than five times the unpaid or underpaid tax". For example, the anchor Wu Sihao, Shan Yahui are engaged in webcasting to obtain income without truthful tax declaration by the tax authorities to recover the tax, plus late payment fees and impose a fine.
2.network anchor through the establishment of a separate, partnership to convert the nature of income
In practice, some anchors in order to achieve a lower tax burden, borrowing relatives, friends identity information to register individual households, individual alone, or through the financial and tax intermediaries to set up individual households, individual alone, and then attributable to their own remuneration for services income to split, decomposed into a number of small income, and then loaded into its control of the individual households, individual alone, to achieve the nature of the conversion of the income, in order to achieve the unlawful purpose of paying less personal tax.
Such techniques have been denied by the tax authorities, it is very likely to be recognized by the tax authorities as tax evasion, according to the provisions of Article 63 of the Tax Collection and Management Law, the tax authorities will recover the unpaid or underpaid taxes, late fees, and impose a fine of more than fifty percent of the unpaid or underpaid taxes, and meet certain conditions, the anchor may constitute a crime of tax evasion, and be held criminally liable.
3.network anchor set up individual households, individual alone after the fictitious services, false invoicing
Some webcasters use the aforementioned way of setting up individual households and individual alone to convert the nature of income to evade taxes, and the invoices issued in the name of the studio may also be recognized as false invoicing. Hosts set up individual households, individual alone according to the "business income" tax items to pay personal taxes, in order not to pay taxes, pay less taxes, in the absence of any real transaction, let others for its studio false invoicing, false increase in costs, reduce taxable income.
Network hosts using individual households, individual false invoicing is an administrative offense, serious, according to the Criminal Law Article 205 one of the provisions of the hosts or will face a severe sanction of seven years imprisonment.
(III) Tax-related risks of MCN organizations and their liabilities
In addition to the fact that MCN agencies, like the platforms mentioned above, have not fulfilled their obligations to withhold and pay taxes on behalf of their network anchors in accordance with the law when adopting the labor or labor relationship model, they are also involved in the following tax risks.
1. In order to incubate its anchors and attract traffic, false invoices are issued to arbitrage funds
As mentioned before, some MCN organizations, in order to attract traffic, incubate their anchors as head anchors and transfer the funds to the staff by means of false invoicing, and then rewarded by the staff.
Once investigated, both the invoicing party and the MCN organization's invoiced party will face administrative penalties or even criminal sanctions.
2. Fictitious labor contract, cheating the flexible labor platform for false invoicing
Flexible labor platforms act as intermediate bridges to connect enterprises with labor needs with spiritual workers. Some MCN agencies take advantage of the characteristics of the spiritual worker platform to summarize, so that their anchors are attached to the spiritual worker platform, and work for the MCN agency in the name of providing labor services. In this way, MCN organizations can not only avoid the anchor social security expenses and withholding obligations, but also obtain invoices from the spiritual labor platform to be cost deduction and offsetting inputs.
In this case, the MCN organization may need to bear the legal responsibility of false invoicing, and the spiritual platform may also be involved in the risk of false invoicing.
III. all parties in the live webcast industry need to pay attention to tax compliance.
To sum up, in the rapid development of the live broadcast industry today, the state has also strengthened the regulation of the industry, all the main parties once the above non-compliant tax behavior, will face administrative responsibility, or even criminal liability, not to take advantage of the personal development of the webcasters, but also not conducive to the live broadcasting platforms, MCN organizations, the subsequent investment and financing, listing and other sustained development. Therefore, all parties need to pay urgent attention to tax compliance.
For the three main parties, they should correctly recognize the tax obligations arising from different legal relationships. For anchor platforms and MCN organizations, they should try to clarify the legal relationship between themselves and their anchors, and specify the rights and obligations of both parties in the contract, such as whether they accept the management of the platforms or MCN organizations, and whether they comply with the rules and regulations, etc. If a labor or service relationship is formed, it is necessary for both parties to pay attention to tax compliance. If a labor or service relationship is formed, platforms and MCN agencies should fulfill their withholding and payment obligations in accordance with the law. In addition, the platform should communicate with the competent tax authorities in a timely manner to avoid being recognized as tax evasion with respect to uncertain tax policies, and the MCN organization should adhere to the bottom line of business authenticity and put an end to false driving behavior.
For anchors, on the one hand, if they choose to engage in live broadcasting related business in the form of individual or self-employed, they should try to obtain prior approval from the tax authorities for the purpose of applying business income tax, so as to prevent such mode from being rejected by the tax authorities. On the other hand, they should also strengthen their learning of tax policies, fulfill their tax declaration obligations according to the law, and pay personal tax.