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Hwuason Law Firm Liu Tianyong Interviewed by ZHONGGUO SHUIWU BAO on Tax-Related Risks and Compliance Advice in Foreign Trade Industry and Published Article
-July 16, 2026, 10:35 a.m.
835Views
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Company Investigated for Obtaining More Than RMB 10 Million in Falsely Issued Invoices; Tax Authority Does Not Use Tax Assessed by Estimation as the Penalty Base
Editor's Note: In June 2026, the Inspection Bureau of the Hami Municipal Tax Service served by public notice a Decision on Tax Treatment (Hami Tax Inspection Treatment [2026] No. 21) and a Decision Not to Impose a Tax Administrative Penalty (Hami Tax Inspection No-Penalty [2026] No. 3). The logistics company involved had obtained falsely issued special VAT invoices and claimed input VAT credits. Its VAT and urban maintenance and construction tax underpayments were characterized as tax evasion, but no penalty was imposed because the five-year limitation period for penalties had expired. As for enterprise income tax, because the company's books and records were missing and an audit-based determination was impossible, the Inspection Bureau assessed the tax payable by estimation; it neither characterized the matter as tax evasion nor imposed a fine. Taking this case as its starting point, this article analyzes why tax assessed by estimation should not serve as the basis for either a finding of tax evasion or the calculation of a penalty. It also discusses the separate application of the tax recovery period and the limitation period for penalties, as well as the availability of tax incentives for small low-profit enterprises under assessment by estimation, with a view to providing guidance to relevant market participants.July 15, 2026, 5:02 p.m.
2373Views
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After the Cancellation of Business Entities Such as Individual Proprietorships, Companies and Partnerships, Are Investors Still Subject to Tax Liabilities?
Recently, the State Taxation Administration disclosed a case involving an individual proprietorship that engaged in "escape-style" cancellation. The actual controller of this individual proprietorship concealed operating income of RMB 207 million from the entity's business activities and subsequently evaded tax obligations by completing deregistration. The tax authority characterized such conduct as tax evasion and issued a decision to recover the tax underpaid, impose late payment surcharges and impose penalties against the actual controller. In practice, there are also numerous instances where legal persons (e.g., limited liability companies) and unincorporated organizations (e.g., partnerships) evade tax obligations through means such as submitting false materials for deregistration, and tax authorities pursue tax recovery from individual shareholders of dissolved companies or partners of dissolved partnerships. Under such circumstances, can tax authorities directly pierce through the business entity and pursue tax liabilities against natural persons? This article intends to analyze different types of business entities for readers' reference.July 13, 2026, 4:11 p.m.
2604Views
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Tax Authorities Release Typical Cases on the Application of Tax Incentive Policies: Four Key Compliance Risks for Businesses Editor’s Note： In recent years, regulatory scrutiny over the application of
Editor’s Note：In recent years, regulatory scrutiny over the application of tax incentive policies has continued to intensify, and businesses are now operating in an environment of heightened regulatory scrutiny and increasingly stringent compliance requirements for claiming tax incentives. As demonstrated by recently published typical cases, many enterprises were not found to have fraudulently obtained tax incentives. Instead, they incorrectly applied tax incentive policies due to factors such as misunderstanding policy requirements or changes in the conditions for eligibility, ultimately resulting in additional tax assessments and late payment surcharges. Drawing on these typical cases, this article examines the principal risk scenarios associated with the improper application of tax incentive policies, analyzes the characteristics of fraudulent claims for tax incentives and the corresponding legal consequences, and offers practical compliance recommendations to assist enterprises in properly claiming tax incentives and managing tax risks.July 10, 2026, 4:49 p.m.
2947Views
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Case Study Alert: Common Tax Risks in the Online Live Streaming Industry and Tax Compliance Recommendations
Editor's Note: Since the beginning of 2026, tax authorities in various regions have centrally exposed multiple typical tax-related cases in the online online live streaming industry, with tax risks erupting frequently. In June 2025, the Provisions on the Submission of Tax-Related Information by Internet Platform Enterprises took effect, expressly setting forth the obligation of online live streaming platforms to submit tax-related information and signaling a continued tightening of tax supervision in the online live streaming sector. This article reviews cases from recent years and relevant new tax regulations, examines the typical tax risks faced by various participants in the online live streaming industry, and offers tax compliance recommendations for reference.July 6, 2026, 4:20 p.m.
3340Views
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Tax-Related Risks and Compliance Management Across the Coffee Industry Chain: Insights from the First Batch of Typical Cases
Editor’s Note:In recent years, China’s coffee industry has been expanding rapidly from traditional cultivation into diversified scenarios such as deep processing, branded retail, cross-border trade, and cultural-tourism integration. As the industry chain continues to lengthen and business models become increasingly complex, tax-related issues such as invoice administration, input VAT credit, and applicable tax rates have also emerged across procurement, processing, sales, import, and export activities. The first batch of typical tax compliance cases for the coffee industry chain, jointly released by the tax authorities of Yunnan, Jiangsu, and Shanghai, signals that the focus of tax administration in the coffee industry is shifting from isolated matters to whole-chain governance. This article examines the business characteristics of different segments of the coffee industry chain, identifies the main tax-related risks that coffee enterprises may face, and offers corresponding tax compliance recommendations for reference.June 26, 2026, 4:21 p.m.
4066Views
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In-Depth Analysis: The Tax Law Logic and Risk Implications of Tax Recovery Against a Listed Company's Employee Stock Ownership Platform Six Years After Deregistration
Editor's Note: On June 18, 2026, a local tax authority served a Notice of Tax Matters by public announcement, determining that the employee stock ownership platform of Ancar Inspection (a listed company) had fraudulently changed its business scope from equity investment to consulting services and had unlawfully applied for the assessed collection method for enterprise income tax (EIT), resulting in approximately RMB 248 million in underpaid EIT. The authority required 47 individual shareholders to bear the additional tax payable and late payment surcharges in proportion to their respective capital contributions. This article uses this case as a starting point to trace the tax planning pathway employed around the lifting of the lock-up on restricted shares held by the employee stock ownership platform. It analyzes the statute of limitations for tax recovery and the strategic risks of raising a limitations defense, the scope for arguments against imposing late payment surcharges, the disputed legal pathways by which tax authorities may pierce the corporate veil and pursue shareholder liability after company deregistration, and the typical tax risk exposures revealed by this case—with the aim of providing reference and cautionary guidance for relevant market participants.June 24, 2026, 5:29 p.m.
4415Views
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Does Reclassifying Shareholder Loans Recorded under Other Receivables as Profit Distribution Give Rise to Additional Corporate Income Tax Liabilities?
Editor's Note:According to the Notice of the Ministry of Finance and the State Administration of Taxation on Regulating the Administration of Individual Income Tax Collection for Individual Investors (Caishui [2003] No. 158), if an individual shareholder borrows funds from the company they invest in within a tax year and fails to repay the loan or use it for the company's production and operation by the end of that tax year, the outstanding balance may be deemed as dividend distribution from the company to the shareholder. Accordingly, long-overdue loans from a company to its individual shareholders are treated as profit distribution for tax purposes.June 23, 2026, 10:11 a.m.
4392Views
