Editor's note: Recently, the refined oil industry has ushered in the new regulations "Management Measures for the Circulation of Refined Oil". The release of the new regulations also means that the tax compliance of the refined oil industry is facing new challenges. The new regulations put forward clear requirements for the admission and exit of operators in the refined oil industry, the construction of the industry's big data system, and the ledger system. Based on this, this article will analyze the tax impact of the new regulations on the refined oil industry by combining tax cases in the refined oil industry and relevant policy documents.

 

Ⅰ   The Case observation: Five cases reveal tax issues in the finished oil industry

Case one: Gas stations hide income through personal WeChat to evade taxes

At the beginning of 2025, the Wenshan Prefecture Taxation Bureau of the State Administration of Taxation lawfully investigated and dealt with the case of a gas station on Shupicha Road in Qiubei County using personal WeChat payments and underreporting income in the account books to conceal income and engage in false tax declaration and tax evasion.

After discovering clues about tax evasion at the gas station involved, the tax bureau, together with local public security, market supervision, and other departments, conducted a surprise inspection of the gas station. The tax department read the sales data of fuel dispensers, the public security department inspected the main control computer of the fuel dispenser, and the market supervision department sealed and suspended the operation of the gas station. The inspection personnel found on-site that only some "manual accounts" and scattered documents were left, and the sales records were messy and incomplete, and no inbound and outbound ledgers were found, making it impossible to obtain complete data from the main control computer of the refueling machine. Through understanding the daily sales model of the gas station, the inspection personnel found that the gas station did not keep sales records, and the gas station staff collected the fuel payment through personal WeChat. Through the investigation and analysis of the gas station's WeChat flow, the police and bank departments identified the actual Control person Cai and found that Cai's WeChat flow matched the gas station's fund flow. Finally, the inspectors determined that the gas station involved in the case was evading taxes and imposed penalties on them.

Case two: According to the clues transferred by the procuratorial organ, it is found that the gas station underreports income to evade taxes

The Beijing Municipal Taxation Bureau of the State Administration of Taxation further analyzed the clues transferred by the procuratorate and lawfully investigated and dealt with the tax evasion case at the Yandongwang gas station in Pinggu, Beijing. The gas station concealed sales revenue by not listing or underreporting income in the account books, made false tax declarations, and underpaid 395,300 yuan in value-added tax and other taxes. At the same time, the company also engaged in other underpayment of taxes.

The Beijing Municipal Taxation Bureau received a transfer letter from the People's Procuratorate of Pinggu District, Beijing, indicating that there is suspicion of tax evasion at the Yandongwang Gas Station in Pinggu, Beijing. The inspection personnel immediately launched an investigation, focusing on the company's sales situation, cost allocation, tax declaration, the basic account fund flow of the inspected company, and the personal account fund flow of the person in charge of the gas station, verifying the suspicion of tax evasion. During the on-site investigation, the inspectors compared the relevant flow, declaration status, member recharge details, consumption details, balance details, and other data of the gas station, and finally found evidence of hidden income at the gas station. It was found that some of the cash income at the gas station had not been declared. At the same time, there are some unreported data in the member recharge details and consumption details.

Case three: Gas stations evade taxes by tampering with fuel dispenser data

The Inspection Bureau of the Yunfu Municipal Taxation Bureau of the State Administration of Taxation, together with the public security and market supervision departments, jointly investigated and dealt with a case of tax evasion by gas stations concealing income. The company involved in the case, Luoding City Dazhong Petroleum Operation Co., Ltd., deleted the tax control data of the refueling machine and concealed sales revenue through third-party acquiring platforms to collect refueling payments and settle them into personal bank accounts.

The Yunfu Municipal Taxation Bureau Inspection Bureau, together with the Public Security Bureau and the Market Supervision Administration, carried out joint law enforcement. Based on the clues and analysis of tax big data, the inspection personnel determined that the enterprises involved were suspected of tax evasion. During the on-site inspection, the inspectors found a desktop computer loaded with a certain brand of gas station management system stored in a hidden room in the office. Upon inspection of the computer, it was found that the data of the fuel dispenser far exceeded that of the front-end fuel dispenser. This abnormal phenomenon became the breakthrough point of the entire inspection. Through in-depth investigation, the inspection personnel found that the gas station management system used could set a "cheating mode". The gas station concealed a large amount of sales revenue by setting a "cheating mode" with high parameter ratios.

Case four: The finished oil enterprise evades taxes by changing the name of sales

Based on accurate analysis of clues, the Shandong Provincial Taxation Bureau has lawfully investigated and dealt with the tax evasion case of Shandong Keyu Energy Co., Ltd. The company involved in the case changed the taxable products of consumption tax to non-taxable products for sale and made false tax declarations, resulting in an underpayment of consumption tax of 154 million yuan.

Case five: Gas stations use off-book income to accumulate cash pools to issue false surplus invoices

The First Inspection Bureau of the Shanghai Municipal Taxation Bureau of the State Administration of Taxation discovered clues through tax big data analysis and tracked them through "cash flow". The case of Shanghai Beisong Material Supply Co., Ltd. (hereinafter referred to as "Beisong Gas Station") using off-book income to accumulate a "cash pool" to falsely issue "surplus invoices" was successfully investigated. After investigation, it was found that the gas station issued 133 false value-added tax special invoices to downstream enterprises without real business, with a total amount of 3.805 million yuan.

The First Inspection Bureau of the Shanghai Municipal Taxation Bureau of the State Administration of Taxation relies on big data to refine three high-sensitivity indicators based on typical illegal methods in the gas station field, targeting the Beisong gas station. The annual sales of the gas station remained stable at around 36 million yuan, but the proportion of uninvoiced income reported was relatively low, and the amount of invoices issued to some enterprises was huge, posing significant suspicions of false invoicing and concealed income. The inspection personnel found that the cash income of the gas station was over 14 million yuan, but only 410,000 yuan was transferred to the company's account and recorded. On the one hand, the inspection personnel tracked the flow of cash, and started to investigate some large-scale invoice-receiving enterprises to find the flow of cash. On the other hand, he directly went to the scene to conduct a surprise questioning with Wang, a cashier at the gas station. Faced with a large amount of evidence, Wang finally admitted that the unaccounted cash was used for daily expenses, and the rest was used for the return of funds from the "surplus tickets" that were falsely issued.

Summary: Through the analysis of the above tax cases, it is found that large data curation plays an important role in the finished oil industry. At the same time, these cases also expose the problems in the refined oil industry, namely, the incomplete system construction of the refined oil industry ledger, resulting in a lack of operational data. Operators may use this to evade taxes and issue false invoices. The finished oil industry should strengthen the construction of big data and internet of things to prevent tax evasion by tampering with the refueling machine system. Government departments should strengthen cooperation, strengthen data sharing for all aspects of refined oil operators, and enhance supervision of the refined oil industry.

 

Ⅱ  The Analysis of the reasons for tax evasion in the finished oil industry

To analyze the tax issues faced by an industry, it is necessary to start from the perspective of the industry chain. The emergence of tax issues in the refined oil industry is closely related to the market structure of the industry, and is closely related to the competition between state-owned enterprises and private enterprises in the industry.

The industrial chain of the finished oil industry can be roughly divided into production, wholesale, and retail links. First, in the production process. According to the "Notice of the General Office of the State Council on forwarding the opinions of the State Economic and Trade Commission and other departments on cleaning up and rectifying small refineries and regulating the circulation order of crude oil and refined oil" (State Council Office [1999] No. 38), "The crude oil produced by petroleum groups and petrochemical groups, the crude oil sold domestically by China National Offshore Oil Corporation, the crude oil produced by China New Star Petroleum Corporation and local oil fields, and the imported crude oil are all uniformly allocated by the state and cannot be sold on their own. From this, it can be seen that state-owned enterprises basically monopolize the production of refined oil, and private enterprises can only purchase refined oil produced by state-owned enterprises for sale. Even though the country opened up crude oil imports in 2015, private enterprises still have quota restrictions on imported crude oil, resulting in higher production costs for private enterprises compared to state-owned enterprises. This has led to high costs for private enterprises on the purchasing side.

Secondly, in the retail sector. As refined oil is related to the stability of the national economy, the state has always implemented the maximum retail price control for refined oil, and the national pricing must be implemented in the retail link of refined oil. In the case of high purchasing costs and national pricing on the sales side, tax issues in the refined oil industry arise. Some refined oil operators, in order to seek profits, reduce taxes through various means to obtain profits under relatively fixed costs and selling prices, thereby giving rise to illegal problems such as tax evasion in the refined oil industry.

 

Ⅲ  How to prevent tax evasion in the finished oil industry

The regulation strengthens the supervision of the finished oil industry from various aspects such as data curation, government cooperation, and internal system construction.

（Ⅰ）The ledger system strengthens tax supervision, and the credit system strengthens differentiated supervision

First, in terms of the account system. According to Article 19 of the "Administrative Measures for the Circulation of Finished Oil Products," "Fine oil operating enterprises shall comply with laws, regulations, and standards in natural resources, planning, construction, quality, measurement, environmental protection, safety production, fire protection, public security, anti-terrorism, commerce, taxation, transportation, meteorology, etc. Establish oil purchase, sales, inventory, and inbound and outbound ledgers, strictly implement the real-name registration system for bulk gasoline purchase and sales, calculate data based on actual data, and improve the documentation of oil source, sales destination, inspection reports, and inspection records. This provision not only implements the "Opinions of the General Office of the State Council on Promoting the High-Quality Development of Refined Oil Circulation" (State Council Office [2025] No. 5), which requires the refined oil industry to establish a ledger system, but also further refines the ledger system. In accordance with Article 21 and Article 30 of the "Management Measures for the Circulation of Refined Oil Products", the measures not only require operators to regularly submit ledger data, but also require operators to submit ledger data for the previous year during annual inspections. In addition, Article 38, paragraph 2 of the "Management Measures" stipulates that if a refined oil operating enterprise fails to establish a ledger system or falsifies the ledger, it will face warnings, criticisms, or fines of up to 50,000 yuan.

Secondly, in the credit system. According to Article 32 of the "Administrative Measures for the Circulation of Refined Oil Products," "local commerce authorities at or above the county level shall, in conjunction with relevant departments, implement credit grading and classification management for refined oil operating enterprises, based on the integrity of the enterprise, standardized management, lawful tax payment, service quality, fulfillment of social responsibilities, and daily supervision." The credit status of refined oil operating enterprises within the administrative region is divided into different levels, and differentiated supervision is implemented in accordance with the law. "According to this provision, the competent department of commerce cooperates with other departments to implement differentiated supervision of refined oil operating enterprises based on various regulatory information, helping tax authorities and other departments focus on supervising enterprises with low credit ratings and high potential for illegal activities. We will effectively prevent and investigate illegal activities such as tax evasion.

The establishment of the ledger system and credit system, supplemented by other measures, helps the tax authorities to discover tax issues in the operation of refined oil products through the submitted ledger data, and under the regulations of data sharing in the upstream and downstream of refined oil products, Discover whether operators in different stages of the refined oil industry have engaged in illegal activities such as tax evasion, and then conduct credit ratings for refined oil operators and implement differentiated management.

（Ⅱ）Big data management system and inter-departmental collaboration to strengthen tax governance

Big data tax investigation is an important means for tax authorities to investigate and deal with illegal activities such as tax evasion. With the support of big data, tax authorities can effectively supervise the taxation of the refined oil industry. Moreover, with the cooperation of various departments, tax authorities can effectively prevent illegal activities such as tax evasion.

According to Article 31 of the "Administrative Measures for the Circulation of Refined Oil Products," "local commerce authorities at or above the county level shall, in accordance with their responsibilities, work with relevant departments to strengthen the collection of basic information and operational data of refined oil operating enterprises within their administrative regions, and strengthen the interaction, sharing, and collaborative application of data in the upstream and downstream of the industrial chain between departments." Encourage the use of big data and internet of things technologies to promote smart gas stations and big data management systems, accelerate the construction of dynamic supervision systems covering wholesale, warehousing, and retail, and improve the efficiency and service level of digital supervision in the field of finished oil circulation. "This provision mainly has two requirements. On the one hand, the regulations require government departments to strengthen big data construction, enhance big data sharing and collaboration between departments, and better strengthen the supervision of the refined oil industry. On the other hand, the regulations also require the refined oil industry to strengthen big data construction, form a dynamic regulatory system for different links from wholesale to retail in the refined oil industry, and improve the level of supervision of the refined oil industry.

In the past, the refined oil industry faced problems such as scattered regulation and inconsistent standards, which are also one of the reasons why it is difficult to control phenomena such as tax evasion in the refined oil industry. With the support of big data, data can be shared between upstream and downstream industries and between different government departments. According to Article 4, Article 31, and Article 32 of the "Management Measures for the Circulation of Refined Oil Products," government departments should strengthen sharing and cooperation in the areas of refined oil information data and enterprise credit. The management measures also clarify the responsibilities and positioning of government departments at different levels, and further clarify the division of responsibilities among leading regulatory departments, law enforcement departments, and other departments. With the support of big data, through the collaboration of multiple departments, tax issues in the refined oil industry can be jointly addressed. Timely and effectively investigate and deal with illegal acts such as tax evasion.

（Ⅲ）Expand the scope of finished oil products, crack down on illegal activities such as name change sales

In practice, some refined oil operators may sell refined oil under the name of "new energy" or "alternative energy" to evade taxes. On the one hand, some enterprises bypass retail operation approvals in the name of "non-finished oil" and illegally sell to end users to evade retail licenses. On the other hand, gasoline and diesel are subject to consumption tax, while products such as "alternative energy" often evade taxes by blurring their names. This phenomenon is clearly required to be severely cracked down on in the "Opinions of the General Office of the State Council on Promoting the High-Quality Development of Refined Oil Circulation" (State Council Office [2025] No. 5).

Article 41 of the "Administrative Measures for the Circulation of Finished Oil" stipulates that "finished oil referred to in these measures refers to gasoline, kerosene, diesel, and alternative fuels such as ethanol gasoline and biodiesel that are mainly composed of the above-mentioned oils, comply with national industrial policies and mandatory product quality standards, and have the same purpose." "Announcement of the Ministry of Finance and the State Administration of Taxation on the Implementation of Some Refined Oil Consumption Tax Policies" (Announcement No. 11 of 2023 by the Ministry of Finance and the State Administration of Taxation) After expanding the scope of refined oil, this regulation will also include ethanol gasoline and biodiesel that comply with national industrial policies and mandatory national standards in the scope of refined oil, further strengthening the supervision of refined oil and cracking down on illegal acts of tax evasion through name-changing sales. In addition, according to the "Interim Measures for the Inspection and Management of Tax-related Products of Finished Oil" (Announcement No. 7 of the State Administration of Taxation in 2025) issued by the State Administration of Taxation, when there is a dispute between the tax authorities and operating enterprises over finished oil, the tax authorities can conduct inspections on finished oil. To determine whether a certain type of finished oil is a tax-related product, in order to prevent operators from evading taxes through means such as changing names for sale. Many laws and regulations related to refined oil have formed a complete regulatory system for the refined oil industry, effectively cracking down on various illegal phenomena of tax evasion in the process of refined oil sales.

 

Ⅳ The Concluding

After the promulgation of the "Management Measures for the Circulation of Refined Oil Products," the dual-track system of "filing + licensing" reflects the national requirements for "broad access" and "strict supervision" in the refined oil industry. Broad access will further promote the integration of the refined oil industry, accelerate the survival of the fittest, and promote the scale and standardized development of the refined oil industry. Against the backdrop of strict regulation, the new regulations also put forward new requirements for tax compliance in the refined oil industry. Operators in the refined oil industry should improve various systems such as enterprise ledgers in accordance with the requirements of the new regulations, and operate in accordance with the regulations and relevant policy documents. Avoid tax risks such as tax evasion.