Recently, the State Taxation Administration publicly exposed eight consumption tax evasion cases investigated and handled by local tax authorities in recent years, covering sectors such as gold, silver and jewelry, liquor, and refined oil. The total supplementary taxes and fines amounted to nearly 100 million yuan, sending a signal that the state is strengthening tax supervision over consumption tax. Based on these eight cases, this article summarizes the methods used to evade consumption tax obligations and alerts corresponding tax risks for readers’ reference.

Editor’s Note：With the full implementation and in-depth operation of Golden Tax Phase IV, China’s tax administration has achieved a fundamental transformation from tax administration by invoices to tax governance by data, marking a new stage of data-driven tax governance, data penetration, and all-dimensional intelligent supervision. Relying on cross-departmental data interconnection and the collection of all tax-related information, combined with precise risk control models built on big data and artificial intelligence, tax authorities have achieved a leapfrog upgrade in their ability to monitor, verify, and issue early warnings for enterprise tax risks. Tax early warning indicators, as quantitative criteria for risk prompts, serve as the core basis for tax authorities to identify tax-related risks and push risk alerts, and also an important reference for taxpayers to conduct self-inspections and proactively prevent potential tax risks. This paper sorts out the common types of tax early warning indicators in practice, analyzes the causes of tax risks, and provides professional references for taxpayers to carry out tax compliance reviews.

Editor’s Note: When tax authorities conduct tax inspections on enterprises that engage in illegal activities such as off-book business operations and concealed income, they usually adopt the deemed collection method to assess and recover underpaid Corporate Income Tax (CIT) on the enterprises’ off-book income. During the defense and explanation process in response to such inspections, enterprises often have disputes and disagreements with tax authorities over issues including whether off-book income and book-recorded income should be taxed separately or deemed collectively for collection, whether taxable income increased upon tax inspection may be used to offset prior-year losses, and whether annual taxable income after inspection adjustment is eligible for preferential tax treatment for small and micro enterprises. Based on a specific case, this article analyzes these three difficult controversial issues.

Editor's Note: Under China's VAT chain-based tax administration system, once an upstream company absconds, goes missing, or is characterized as having engaged in fraudulent invoicing, the risk readily propagates downstream along the invoice chain. Invoices obtained by downstream recipient companies are frequently classified as abnormal tax deduction vouchers or fraudulent invoices, triggering a cascade of consequences — including reversal of input VAT credits, disallowance of pre-tax deductions for corporate income tax, characterization as tax evasion, and even criminal prosecution. Drawing on current tax regulations and practical experience, this article analyzes the criteria for characterizing upstream absconding and fraudulent invoicing, the risk transmission mechanisms involved, and the primary tax risks faced by downstream companies. It also offers actionable compliance strategies for invoice recipient companies.

Editor's Note: Recently, a number of well-known listed companies have been subject to tax adjustments by tax authorities on the grounds that their equity and asset transfers by book-entry fail to meet the conditions for special tax treatment. According to the disclosed case details, the core challenge from tax authorities focuses on the following: the transferor, which received equity payment in the transfer, transferred the acquired equity to a third party within 12 months after the completion of the equity transfer, resulting in a change in the equity structure. Then, does the statutory condition for special tax treatment on equity and asset transfer by book-entry include the continuity of shareholder interest principle? Will the transfer of the acquired equity by the transferor within 12 months after the transfer disqualify the restructuring transaction from special tax treatment? The author conducts an analysis based on a typical case.

Editor’s Note: Recently, we have received inquiries from a number of enterprises regarding their tax credit ratings. These enterprises were notified through pop-up alerts in the Electronic Taxation Bureau that their tax credit ratings had been directly downgraded to Grade D. Why would an enterprise’s tax credit rating be directly downgraded to Grade D? What impact does a Grade D rating have on the enterprise? Will this tax credit information be publicly disclosed or made available for public inquiry? How can the tax credit rating be restored quickly? This article provides an analysis of these questions.

Editor's Note: Since the implementation of the judicial interpretation on tax-related crimes by the Supreme People's Court and the Supreme People's Procuratorate (hereinafter referred to as the "Two Supreme Judicial Interpretation"), the judicial adjudication pattern of tax-related criminal cases has undergone adjustments due to the narrowing of the scope of the crime of falsely issuing special VAT invoices by this interpretation, and the trend of charge diversion has become increasingly significant. Based on the public judgment document data from the implementation of the interpretation to the end of 2025, combined with typical cases of the Supreme People's Court, judge training materials, Criminal Trial Reference and defense practice experience, this article sorts out and analyzes the latest adjudication trends of the crime of tax evasion in current judicial practice, and summarizes the key points of targeted defense strategies, aiming to provide practical reference.

Editor's Note The crime of falsely issuing invoices, added by the Criminal Law Amendment (VIII), has long been regarded as mainly applicable to the evaluation of acts such as falsely issuing Value-Added Tax (VAT) ordinary invoices and other invoices without tax deduction function. This offense is classified as a conduct crime, meaning criminal liability can be pursued once the statutory incrimination threshold is met, and this issue was basically uncontroversial in the past. Following the issuance of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Endangering Tax Collection and Administration (Fa Shi [2024] No. 4), in numerous cases involving the obtaining of falsely issued special VAT invoices, where the fraudulently inflated input VAT does not exceed the scope of the taxpayer's taxable liability, the act is determined to lack the intent to fraudulently offset tax, and is categorized as a tax evasion act of "falsely offsetting input VAT". Such acts are eligible for the application of the administrative prepositive procedure, and no criminal liability will be pursued after the fulfillment of administrative liabilities, including paying back underpaid taxes, late payment surcharges and administrative fines. This has created a notable split in the criminal liability assessment between the false issuance of special VAT invoices and ordinary VAT invoices: the former, which usually entails greater social harmfulness, can be conditionally exempted from criminal liability through fulfilling administrative liabilities; while the latter, which usually has lesser social harmfulness, may still result in a conviction even if the administrative liabilities are fully fulfilled. How to coordinate and resolve this contradiction? The author attempts to conduct an analysis using the method of natural interpretation for readers' reference.