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Scrap Material Recycling Enterprises Facing Criminal Charges for False Invoicing - Key Points for Appeal to Potentially Secure a Reversal
In recent years, with the launch of the "Crackdown on Fraud and Forgery" special campaign by four ministries, criminal cases related to false invoicing in the scrap material industry have continued to surge. The number of cases is on the rise, and heavy sentences are frequently applied. According to the search results, in 2020, a total of 90 cases of enterprises engaging in harmful tax-related crimes were publicly disclosed on the China Judgment Online platform. Among them, cases involving the crime of falsely issuing value-added tax special invoices accounted for the overwhelming majority, reaching 87 cases. In these 90 cases, there were 66 cases in the first-instance procedure. Among them, 23 cases resulted in sentences of more than ten years of imprisonment, and one case even received a life sentence, with a heavy sentence application rate exceeding 36%. Cases where probation was applied amounted to 19, with a probation application rate of less than 29%. Constrained by the specific nature of the scrap material industry, the inability of individual suppliers at the source to issue value-added tax special invoices has become a significant factor hindering the development of the industry. This issue has led to a considerable number of related practices, such as affiliation and proxy invoicing. In practice, many defendants who are still deemed to have committed the crime of false invoicing and are subject to heavy sentences after the first and second-instance procedures raise objections to the judgment. Initiating an appeal becomes an important way for these defendants to safeguard their legal rights. In this article, lawyers from Hua Tax Law Firm, drawing on their practical experience in representing cases related to false invoicing in the scrap material industry, analyze key issues and practical points to consider during the appeal process, providing reference for relevant enterprises and individuals.2012Views
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A certain scrap material enterprise, which has been using self-issued vouchers for accounting for many years, has been ordered by the tax authorities to replace them with invoices and pay a substantia
From the perspective of policy context, there has not been significant change in the operating model of the scrap material industry, and the consistent practice of granting value-added tax (VAT) preferences reflects the country's policy orientation towards resource recycling. However, since the cancellation of the policy of VAT prepayment and refund for the scrap material industry in 2000, and the further cancellation of the VAT exemption for the sale of scrap materials by recycling units in 2008, scrap material recycling enterprises have faced the dilemma of lacking input invoices and bearing a heavy burden of VAT, with difficulty obtaining pre-tax deduction vouchers for corporate income tax.Since 2017, there have been successive outbreaks of fraudulent cases involving scrap material recycling enterprises in various regions of the country. The cases involve numerous upstream and downstream companies, and the amounts involved are enormous. Once the crime of issuing fraudulent VAT special invoices is established, the companies and individuals involved will face serious criminal liability. As a result, in order to avoid the potential risk of issuing fraudulent invoices, many scrap material recycling enterprises have chosen to forgo obtaining input invoices and fully pay the VAT on the sales link, opting instead to use self-made vouchers for cost deduction.Recently, tax authorities in some regions have begun to investigate the tax situation of scrap material recycling enterprises, with particular attention to the issue of pre-tax deduction vouchers for corporate income tax. In this issue, the author combines multiple relevant consultations to analyze the issue of pre-tax deduction vouchers for scrap material recycling enterprises, with the aim of providing recommendations for the scrap material recycling business.1889Views
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Solid waste is sold to downstream disposal, and is required by the tax Bureau to pay more than 50 million yuan in environmental protection tax and late fee.
As most production-oriented enterprises do not have the conditions for waste disposal in accordance with the standard, they have been using the "entrusted disposal" method to deal with the lack of mandatory provisions of the law in the era of "sewage charges", but since the official implementation of the Environmental Protection Tax Law in 2018, the tax authorities have issued a number of large environmental tax fines against such production-oriented enterprises. However, since the official implementation of the Environmental Protection Tax Law in 2018, the tax authorities have issued a number of large environmental tax fines for such production-oriented enterprises, triggering heated debates, but also attracting the attention of enterprises to environmental tax compliance. On the one hand, due to the environmental protection tax is mostly the leveling of sewage charges, its levy object, scope, tax standard, tax basis and did not make large adjustments, enterprises in the fee to tax will not obviously feel the increase in the tax burden, and therefore did not pay attention to. But on the other hand, due to the "fee to tax" after the enterprise should bear the legal responsibility is also a trend of aggravation, before the sewage charging system is not enough rigidity of the enterprise will face a huge risk of violation of the law. Starting from two practical cases, the author systematically analyzes the compliance of "entrusted disposal" of wastes by analyzing the focus of disputes between tax enterprises and the two sides for the benefit of readers.2253Views
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Achievement: The Procuratorate closed the case of a waste materials recycling business suspected of "false invoicing" with no prosecution
On February 1, 2019, the criminal case of a waste materials recycling business enterprise, represented by Huashui, for allegedly falsely issuing VAT invoices (with price and tax totaling tens of millions of yuan) was reviewed and concluded by the competent People's Procuratorate. In the end, the public prosecution authorities made and delivered the Decision of Not Prosecuting to the enterprise and four employees (all defendants), and the enterprise and the natural persons involved in the case were exempted from criminal liability. After nearly one year of defense work by Huatax lawyers, the case was concluded with the result of non-prosecution by the prosecutor's office, which was highly recognized by the client, and coincided with the eve of the Chinese New Year, and the people involved in the case were able to be reunited with their family members, which was also a great relief to us. Due to the impact of tax policy and industrial characteristics and other reasons, the waste materials recycling business industry has been the hardest hit by the case of false opening, the tax risk is high. This paper summarizes and analyzes the relevant circumstances and core legal issues of this case, with a view to providing useful reference for the judicial handling of the suspected cases of false opening of relevant enterprises in the future.2211Views
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"Tax rebate incentive" is a loss of state tax revenue? Such a judgment is not justified by law
The National Audit Office released the Audit Work Report on the Implementation of the Central Budget and Other Financial Income and Expenditure in 2020 on June 7, 2021, which pointed out that 15 provinces and municipalities returned 23.873 billion yuan of taxes in the name of financial incentives and other names, and most of the return ratio was more than 90% of the locally shared income. And put forward, some grassroots financial expenditure pressure increases, to urgently clean up and regulate the illegal return of tax behavior in some places. In order to encourage the development of the circular economy, a number of places on the waste materials recycling enterprises have introduced a financial return incentive policy, the release of the work report, will further exacerbate the risk of invoice compliance of waste materials recycling business enterprises. In judicial practice, some courts have denied the recycling business model, and the amount of financial rebates obtained by the enterprise is recognized as the loss of national tax and characterized as false invoicing. Through a case analysis, Huatax lawyers pointed out that fiscal refund cannot be equated with tax loss, and discussed how the authenticity of goods transaction and tax loss involved in the crime of false VAT invoice should be recognized.2065Views
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Frequent gold ticket to ticket cases around the world, a large number of non-ferrous metal enterprises, renewable resources enterprises are implicated
Recently, Hwuason Law Firm has received a number of non-ferrous metal and scrap steel enterprises' consultation on the case of variable invoice and false invoicing. Combined with the frequent cases of non-ferrous metal industry's gold invoices and variable invoices in recent years, the issue of variable invoices and false invoicing in non-ferrous metal and renewable resources industry has become the focus of attention of the tax authorities. Due to the expensive value of gold itself, strong value preservation, by consumers collection and investment favorite, consumers do not ask for invoices of behavior led to the gold invoice "surplus votes" exist; at the same time due to the special tax policy of gold and gold ticket huge profits trend, emerged a number of gold ticket false opening gang; and due to the gold is easy to other non-ferrous metals melting characteristics, gold is easy to other non-ferrous metals melting characteristics, gold is easy to other non-ferrous metals melting characteristics, gold is easy to other non-ferrous metals melting characteristics. And because gold is easy to melt with other non-ferrous metals, gold invoices are mostly combined with non-ferrous metal industry, and extended to renewable resources metal recycling enterprises, which makes the tax risk of enterprises in the business chain surge.2173Views
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Non-ferrous metal billion yuan false opening case frequently exploded, tax-related risks implicating many industry enterprises
Non-ferrous metals is one of the pillar industries to promote the development of China's national economy, China is a large country with non-ferrous metal resources, and the scale of the industry ranks steadily in the forefront of the world. However, in recent years, frequent non-ferrous metal false invoicing cases, a single case involving tax amount even more than one billion yuan, resulting in a large loss of our tax money. At the same time, the non-ferrous metal industry has long been confined to the lack of input invoices, logistics and transportation costs of bulk commodities and other issues, the industry seeks to save itself at the same time, if you do not pay attention to the prevention of tax risks, it is extremely easy to incur administrative tax inspections, which in turn suffers from administrative penalties or even criminal penalties. In view of this, this paper will start from the main tax matters of the non-ferrous metal industry, analyze the tax-related risk points of the non-ferrous metal industry, and provide suggestions for enterprises to deal with the risk.2174Views
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Case: Huashui helped a enterprise to carry out administrative reconsideration and successfully recovered the enterprise income tax and late payment fees totaling more than 11 million
Recently, a metallurgical steel enterprise obtaining confirmed false VAT invoices for tax adjustment dispute administrative reconsideration case handled by Huashui was concluded, and the respondent, Inspection Bureau of a Municipal Taxation Bureau, changed the tax treatment decision under reconsideration in the reconsideration procedure, and no longer adjusted the enterprise's income tax payment, and the enterprise effectively avoided the loss of back payment of income tax and late payment fee totaling more than RMB 11 million. The core dispute and resolution of this case are briefly shared with a view to providing useful reference for enterprises with similar problems in resolving tax-related disputes.2531Views