Editor's Note: Due to the lack of clear provisions in the current law on the division of responsibility between the investor and the actual controller of a sole proprietorship enterprise, as well as the assumption of historical tax liabilities after the change of the investor, tax law enforcement disputes and enterprise compliance risks occur frequently in practice. This article analyzes from different dimensions and clarifies that the tax bureau cannot directly enforce the so-called "real controller" property of a sole proprietorship enterprise, and the tax liability of a sole proprietorship enterprise after the change of the investor needs to be differentiated from different situations, aiming to provide practical guidance for the standardization of the tax treatment of a sole proprietorship enterprise.

In the purchasing and selling chain, the coal industry has long existed the situation of selling without invoices, resulting in coal trading enterprises not being able to obtain invoices for VAT input deduction and pre-tax deduction of income tax when purchasing coal; and in the transportation chain, as the actual individual drivers did not issue transportation invoices to the coal trading enterprises, resulting in the same problem of not having invoices to be recorded in the accounts. In order to cope with the above dilemma and reduce operating costs, some coal trading enterprises have set up a third party in the purchase and sale chain and obtained invoices from it. With the in-depth promotion of the joint crackdown on tax-related crimes by eight departments, the risk of false invoicing by this kind of third-party invoicing companies is frequently occurring, which causes the downstream coal enterprises receiving the invoices to face the risk of false invoicing and tax evasion in terms of administrative and even criminal liabilities. Based on the recent tax-related cases in the coal industry, this article analyzes the tax-related administrative and criminal risks of the “proxy invoicing” business of coal trading enterprises and puts forward risk prevention suggestions for readers' reference.

The essence of the act of changing petrochemical invoices is to help the enterprises using the invoices to evade the consumption tax rather than to cheat the VAT. In the case of petrochemical invoicing, although some judicial authorities can recognize the problem of tax evasion, they may be hesitant to impose the crime of tax evasion due to the fact that the case does not satisfy the pre-conditions for administrative penalties. In this article, we will take a petrochemical bill change case represented by China Tax Lawyer as a reference to analyze that the administrative penalty imposed by the tax authority is not a pre-condition for pursuing the criminal responsibility of tax evasion, and combine the specific circumstances of objective inability and legal impossibility to explain that even if the tax authority has not imposed administrative penalty, it is not a violation of Article 201 of the Criminal Law that the perpetrator of the petrochemical bill change is subject to the criminal responsibility of tax evasion.

Recently, an enterprise was required by the tax authorities to pay back the tax and pay the corresponding late payment fee due to the non-payment of land use tax for the construction of farms in the administrative villages under the jurisdiction of the established towns, which involves a huge amount of money. It is understood that this kind of controversial case occurs all over the country, and the regulations on whether the scope of land use tax of formed towns includes administrative villages are not the same in different places. In this paper, we would like to briefly analyze the scope of land use tax in relation to this case for the reference of enterprises.

In M&A and reorganization, the use of partnership structure to implement equity transfer is a common operation, and its tax treatment follows the principle of "share first, tax later". In the past, it was common to use this structure for tax planning. Starting from 2022, according to the Announcement on the Administration of Individual Income Tax Collection on Income from Equity Investments (Announcement No. 41 of the Ministry of Finance and the State Administration of Taxation of 2021), equity investment partnerships have been subject to the full application of checking and collection of income tax. This article reveals, through a case study, the risks and coping strategies faced by enterprises encountering false tax declarations by "black intermediaries" in the context of M&A under this policy, with the aim of alerting taxpayers and intermediaries to pay attention to tax compliance and avoiding losses due to irregularities in operation.

The Measures for the Administration of Vouchers for Pre-tax Deduction of Enterprise Income Tax (State Administration of Taxation Announcement No. 28 of 2018) clarifies the requirement of using invoices as vouchers for pre-tax deduction of enterprise income tax. However, in practice, in the case of real cost expenditure, there are numerous problems such as homemade vouchers accounted for due to industry specificity or invoices obtained by the downstream due to upstream false invoicing being recognized as non-compliant, etc., and the vouchers according to which the enterprises make pre-tax deductions are usually facing the risk of adjusting the back-taxes due to non-compliance with the requirements of Announcement No. 28. For the enterprises involved in the case, under the aforementioned circumstances, in addition to striving for full deduction in accordance with the substantive requirements for pre-tax deduction under Article 8 of the Enterprise Income Tax Law, applying the approved levy and properly selecting the approved method is also a way of adjusting the balance between the recovery of tax and safeguarding the legitimate rights and interests of the taxpayers. Based on the policy provisions, this article analyzes the applicable conditions of the approved levy and the statutory adjustment methods, and analyzes the solution to the problem of pre-tax deduction vouchers for the readers' reference.

Recently, many domestic individuals who opened financial accounts in Hong Kong to speculate on U.S. stocks have received SMS notifications from tax authorities around the world, suggesting that they have overseas income that has not been declared as taxable in accordance with the law and requesting them to self-examination and declaration of back taxes. How do China's tax authorities obtain information on the financial accounts opened by domestic individuals in Hong Kong or abroad, and how do they grasp the behavior and income from overseas stock investments? Does a domestic individual need to declare tax in China for the income from investment and wealth management in overseas securities market using financial accounts outside of Mainland China, what legal responsibility will he/she face if his/her income from overseas stock speculation is discovered by the tax authorities without tax declaration, and how to

In the first half of this year, some local tax authorities have started to implement risk countermeasures against the alleged violation of tax preferential policies for corporate venture capital enterprises. Up to now, the enterprise consultation received by Huatax shows that the tax incentives that are accused of enjoying in violation of the law are mainly the 15% tax rate of enterprise income tax for western development and the 15% tax rate of enterprise income tax for Hainan Free Trade Port, and the reason for violation is that the VC enterprises have not filed in accordance with Interim Measures for Administration of Venture Capital Enterprises, and do not have the qualification for enjoying the above mentioned tax incentives. The reason for denying the qualification of VC enterprises to enjoy the tax incentives is obviously the lack of clear and accurate tax law basis, which is difficult to be justified. This paper analyzes the rules related to the filing of Venture Capital Enterprises and the preferential policies of Hainan Free Trade Port.