The issuance and deduction of VAT special invoices are necessary matters for the production and operation of most enterprises. VAT invoices, as important legal documents for VAT input deduction, are the basis for the normal operation of the VAT chain and the realization of national tax collection. False invoicing has not only damaged the order of invoice management, but also caused the loss of national tax, and has become the key target of tax, public security and other departments for a long time. In the recent Supreme People's Court, the Supreme People's Procuratorate tax-related crimes judicial interpretations and typical cases of the press conference, the Ministry of Public Security, Economic Crime Investigation Bureau, deputy director of the first level inspector Wu Di pointed out that in the past five years, the procuratorial organs to accept the examination and prosecution of cases of jeopardizing the administration of tax collection, the crime of fraudulent opening of special invoices for value-added tax accounted for about 80%. Wu Di also pointed out that precious metals, agricultural products, waste materials and other industries are the high incidence of fraudulent tax crimes in the field of renewable resources industry, for example, because of the inherent tax dilemma, renewable resources industry business model construction and invoicing the legitimacy of the existence of a number of disputes, the problem of false invoicing is prominent. This time, the judicial interpretation of the two high courts has made more changes to the crime of false invoicing of VAT and sentencing, and enterprises should pay attention to the changes in the risk of false invoicing brought by the judicial interpretation, adjust the business model in time and do a good job in compliance management. Based on the author's continuous research and agency experience in the field of false invoicing and the resources recycling industry, the author discusses the important revised clauses of the crime of false VAT invoices in the judicial interpretation of the two high courts and analyzes the changes and impacts on the enterprises in the resources recycling industry for the readers' reference.

Since this year, audit, taxation and other departments in the form of meetings or documents clearly to strictly investigate local investment in the form of tax-related violations, Jiangxi, Shanxi, Zhejiang and other places have also carried out remedial action to clean up undue interference in the market and subsidies or rebates linked to tax revenue. Due to the inherent source invoice dilemma of the industry, resources recycling industry mostly exists in the business operation mode relying on the financial rebate policy, recycling enterprises through the enjoyment of financial rebates to reduce the tax burden due to the impossibility of obtaining input invoices and the full amount of tax. Under the background of strict investigation of tax rebates, recycling enterprises applying the financial rebate policy are facing serious tax-related risks. This article analyzes the tax-related risks under this business model from the motivation for recycling enterprises to set up a trade chain in the park to enjoy the fiscal rebate, and further puts forward tax compliance suggestions for enterprises' reference.

The recycling business of recyclable resources is prone to the risk of false invoicing. In practice, to strengthen tax management, some tax bureau in certain regions require recycling enterprises to sign affiliation agreements face-to-face with individual sellers affiliated under their name to be recognized as affiliated. This requirement aims to clarify the criteria for determining affiliation relationships and prevent the occurrence of phenomena such as forged affiliations. However, this requirement may exacerbate the contradictions in the operation of affiliated businesses in the recycling industry, leading to further increases in tax risks for recycling enterprises. This article intends to analyze the causes of the affiliated operating model in the recycling industry and introduce two perspectives on the establishment of affiliated relationships in practice. This analysis aims to provide insights into the practical challenges and business risks of the "face-to-face signing" requirement.

Recycling of renewable resources is an important part of the comprehensive utilization of resources. Under the policy background of "accelerating the green transformation of the development mode" and "comprehensively implementing the strategy of saving", the construction of the institutional system of China's renewable resources industry has been continuously improved. In the field of taxation, all policies are constantly adjusted with the changes in the macro environment and the reality. In recent years, the renewable resources industry has witnessed a number of cases of false invoicing involving a large amount of subject matter and a wide scope, and the business model of renewable resources recycling enterprises has triggered a large amount of controversy. In this paper, we will firstly sort out the tax policies and practical dilemmas of renewable resources recycling enterprises, discuss the tax risks under the common business model, and focus on analyzing the new model that has changed after the implementation of No. 40, and analyze the risk points therein for readers' reference.

On December 30, 2021, the Ministry of Finance and the State Administration of Taxation (SAT) issued the Announcement on Improving VAT Policies on Comprehensive Utilization of Resources (No. 40 of 2021), which stipulates that renewable resources recycling enterprises can choose to apply the simplified tax method to calculate and pay VAT according to the 3% levy rate. The new policy has been implemented since March 1, 2022, and for more than a month, the implementation of the landing around the world is not the same, with the waste enterprises reflecting the majority of the problems, according to the in-depth understanding and observation of Huayi, the new policy has not yet completely brought the waste materials industry out of the dilemma.

Since 2017, with the concentrated efforts of tax authorities in the special rectification of the scrap material industry, the number of fictitious invoicing cases in the scrap material industry has surged. Companies and individuals involved in these cases are facing significant administrative and criminal risks. Based on recent cases handled by Hua Tax Agency in the scrap material industry, these cases have gradually extended to both ends of the supply chain, involving a wide range of entities. Individuals in different transaction segments, including individual sellers, recycling enterprises, and end-users, are often implicated. The tax-related criminal risks now cover various aspects of scrap material procurement and sales transactions. The concentrated outbreak of fictitious invoicing cases imposes stringent requirements on legal defense.This article, drawing on an understanding of the scrap material industry and knowledge of tax and criminal laws, along with insights gained from numerous fictitious invoicing cases handled by Hua Tax Agency, analyzes business models, elements constituting fictitious crimes, case facts, and evidence. Based on this analysis, the article puts forward six key points for a defense of innocence from the perspectives of conviction and sentencing. These points are intended for reference by tax professionals and business personnel.

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.

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.