High-Income Individuals Tax-Related Risk Report (2022)

Since the implementation of the new individual income tax system in 1994, tax authorities at all levels throughout the country, in compliance with the instructions of the leaders of the CPC Central Committee and the State Council on improving and strengthening the administration of individual income tax collection, have always made the regulation of high incomes and the alleviation of the contradiction of inequitable distribution of income in the society as the key point of the work of collecting and managing individual income tax, and have taken a variety of measures to intensify the efforts of collecting and managing individual income tax on high-income industries and individuals. However, there is no relevant document to determine the basis for the division of high-income and high net worth taxpayers.
According to the data statistics of China Private Wealth Report 2021 jointly released by China Merchants Bank and Bain, the number of high-net-worth individuals (with investable assets of more than $10 million) in mainland China was 2.62 million by the end of 2020, with a compound annual growth rate of 15% from 2018 to 2020, and is expected to reach 2.96 million by the end of 2021. By the end of 2020, the per capita investable assets held by China's HNWIs will be approximately 32.09 million yuan, with a total of 84 trillion yuan of investable assets; it is expected that by the end of 2021, the size of the investable assets held by China's HNWIs will reach approximately 96 trillion yuan.
Along with the rapid growth in the number of high-income people in Mainland China, there is an increasing demand for high-income people to save tax through tax planning. Correspondingly, tax authorities around the world have tightened up the collection and management of personal income tax, and there are frequent cases of high-income earners being recognized as tax evaders or having their taxes adjusted.
This report is compiled based on Huatax's analysis and research on the tax administration policies of high-income groups, combined with the typical tax-related cases of high-income groups in which Huatax has participated in recent years, with the aim of revealing the major tax risk points of high-income groups both inside and outside the country from the perspective of the characteristics of the tax administration of high-income groups and putting forward targeted compliance suggestions on this basis, with a view to providing guidance and reference for the tax compliance of high-income groups.
It should be noted that the term "high-income group" in this report refers to high-income taxpayers in Mainland China in a broad sense, including high-income groups (e.g., those with income of more than RMB 10 million) and high-net-worth groups (e.g., those with investable assets of more than RMB 10 million).

Nov. 26, 2023, 1:57 a.m.

1348Views

Internet Platform Tax-Related Criminal Risk Report (2022)

The combination of the Internet and real industries is a trend in the era of digital economy. Relying on the Internet's features of security, high-speed, real-time, transparency and traceability, a large number of traditional industries have been revitalized, especially during the special period affected by the new coronavirus epidemic. For example, logistics as a traditional industry and the integration of the Internet gave birth to the network freight, as a new industry for the realization of the logistics industry as a whole to reduce costs and increase efficiency has made an important contribution, even under the impact of the epidemic is still to promote China's realization of the total amount of social logistics of nearly 300 trillion yuan, reigning as the world's first. Another example, in the industrial restructuring and the epidemic spawned, flexible employment has become one of the hotspots of the current market concern. According to a third-party research organization, flexible labor has just been born, and its market size will reach 648 billion in 2020 and over 870 billion in 2021. In the huge market prospects and national policy support, China's more than 300 logistics enterprises to complete the network platform online service capacity identification, more than a hundred more than to obtain a network freight license for the integration of social dispersion of capacity, enhance the norms of freight transport, protection of drivers, owners of legal rights to play an important role; at the same time, China has also emerged in hundreds of flexible labor platform, the Internet tax agent platform, for the employment needs of the At the same time, hundreds of flexible labor platforms and Internet tax agent platforms have emerged in China to provide flexible labor and tax optimization solutions for enterprises with labor needs. However, in the early stage of operation, the national industry laws and regulations are not perfect and supervision is not in place, some enterprises in the three major Internet platforms fail to grasp the scale and boundary of legal operation, or in order to expand their business, there are irregular operations, or for the sake of momentary interests and engage in illegal behaviors, which leads to criminal risks related to taxation, not only subjecting themselves to economic penalties and personal freedom penalties, but also affecting the sustainable and healthy development of the whole industry in the country. In 2021, the three major Internet platforms all broke out with major tax-related cases and important cases, although the number is not large, but the wave and its downstream customers are in thousands and the scope is very wide, which centrally reflects the weak links in the business and tax treatment of enterprises, and also reflects the higher requirements put forward by the national regulatory authorities on the compliance of enterprises. In order to better prevent tax-related risks and resolve tax-related problems, Huatax team has combined the new development and characteristics of tax-related cases on the three major Internet platforms and the specific provisions of China's tax law and criminal law to form this special report, which will help the enterprises to operate in a lawful and compliant manner, and at the same time to make professional and effective responses when dealing with tax-related cases.

Nov. 26, 2023, 2:12 a.m.

822Views

Coal Industry Tax-Related Criminal Risk Report (2022)

As the basic energy of China's national economy, coal has important strategic significance. Due to the special nature of coal resources, the state's management of the coal industry has a large degree of administrative dominance, the voice of coal enterprises of different natures in the industry chain is light and heavy, private coal enterprises are not standardized, management is not perfect, risk control is not sufficient, and many other reasons, so that the private coal enterprises are more likely to be involved in tax-related risks and criminal risks.
February 28, 2020, Inner Mongolia to carry out special rectification in the field of coal reverse 20 years of action, followed by a number of other provinces, including Shanxi, Yunnan, Sichuan, Xinjiang and other provinces have also launched the coal field of self-examination and self-correction. Multi-departmental coordination has led to the investigation and prosecution of a number of cases of tax violations by coal enterprises, which has led to further fermentation of tax-related and criminal risks of coal enterprises.
In March 2021, the Opinions on Further Deepening the Reform of Tax Levy and Administration issued by the Central and State Offices explicitly regarded coal and other industries as a key area of concern, and severely cracked down on illegal and criminal behaviors of false invoicing, tax cheating and tax evasion in coal and other industries, and the SAT made it clear that the SAT would be guided by tax risks, make full use of big data, accurately implement tax supervision, focus on key areas, and focus on investigating and dealing with tax-related illegal behaviors such as false and fraudulent invoices to cheat tax and concealment of income to evade tax. income tax evasion and other tax-related illegal behaviors, making the tax-related and criminal risks of coal enterprises the focus of attention and crackdown.
In October 2021, the fight against the three counterfeits was taken to a higher level, the Supreme Prosecutor and OFAC joined in, the four ministries were upgraded to six departments, the special action was upgraded to a regularized crackdown, the departments shared data and worked jointly to crack down on all kinds of false invoicing and tax fraud and related enterprises, and the tax and police jointly investigated and dealt with a number of big cases of false invoicing and tax fraud in the coal field, so that the tax-related criminal risks of the coal enterprises were triggered at the first instance.
Tax-related criminal cases have a low threshold of incrimination and heavy criminal liability, and entrepreneurs will be put behind bars if they are not careful. The tax-related criminal risk belongs to the "sword of Damocles" hanging over the heads of coal enterprises and entrepreneurs. But for the practice of coal enterprises outbreak of tax-related criminal cases, the facts of the case are not the same, some are the use of coal enterprises in the name of violent false tax fraud, some are enterprises in the process of operation there are management loopholes and by the staff fraud, customer fraud, some are the existence of imperfections in the management system of the enterprise and thus triggered the risk of tax-related, some based on the special nature of the coal industry, such as the truth on behalf of the opening, the business of the affiliation for the existence of these circumstances and was filed for criminal responsibility, and the case of the criminal liability. For enterprises and entrepreneurs who have been prosecuted for criminal liability due to these circumstances, special attention should be paid to avoiding tax-related criminal liability as far as possible by combining the provisions of tax law and criminal law.
The Report on Tax-Related Criminal Risks in Coal Industry (2022) is a summary of Huazhan's in-depth observation of the coal industry and its successful experience in representing coal enterprises in tax-related criminal cases, aiming at sorting out the latest tax policies in the coal industry, analyzing the tax-related criminal risks of coal enterprises in the judicial practice, and putting forward targeted response suggestions, with the aim of providing reference for coal enterprises to maximize the prevention of tax-related criminal risks.

Nov. 26, 2023, 2:51 a.m.

848Views

Petrochemical Industry Tax-Related Criminal Risk Report (2022)

The petrochemical industry is one of the important economic pillars of China. Since the Golden Tax Phase III went online in 2015, the tax and judicial departments have made unprecedented efforts to investigate and deal with petrochemical enterprises' evasion of consumption tax by means of variable invoicing, and the criminal cases of variable invoicing and false invoicing in the petrochemical industry have erupted on a large scale across the country.At the beginning of 2018, the State Administration of Taxation (SAT) issued the "Announcement on the Relevant Issues on the Administration of the Levy and Collection of Consumption Tax on Refined Products Oil," and set up a module of refined products oil invoicing on the Golden Tax Phase III system, so as to eliminate the traditional Illegal invoice-changing behavior has been completely eliminated, but new types of invoice-changing transactions driven by consumption tax interests still continue to emerge, and various types of invoice-changing cases, such as industrial white oil, outsourced processing, and gasoline-to-transportation, driven by value-added tax interests, have shown regional and cyclical outbreaks. The criminal risk of false VAT invoicing by petrochemical enterprises remains severe. Based on the data analysis of criminal cases of false invoicing in petrochemical enterprises and the background observation of the normalized mechanism of the national action against "three counterfeits", this report analyzes the potential tax-related criminal risks of traditional and new types of invoice-variation transaction modes of petrochemical enterprises and combines with the analysis of the successful defense cases of Huazhong Tax Lawyers' team to provide guidance and reference for petrochemical enterprises on the tax-related criminal compliance for the year of 2022. The team also analyzed the successful defense cases and provided guidance and reference for petrochemical enterprises on tax-related criminal compliance in 2022.

Nov. 26, 2023, 2:37 a.m.

803Views

Foreign Trade Industry Tax-Related Criminal Risk Report (2022)

The year 2021 is the opening year of China's "Fourteenth Five-Year Plan". In the face of the severe impact brought about by the global epidemic of Crown Pneumonia, China's foreign trade import and export has demonstrated strong resilience, and has delivered an eye-catching report card in the face of many difficulties and challenges: according to customs statistics, the total value of China's import and export of trade in goods in 2021 will reach RMB 39.1 trillion yuan, an increase of 21.4% compared with that of 2020. Among them, exports were 21.73 trillion yuan, up 21.2%; imports were 17.37 trillion yuan, up 21.5%. Compared with 2019, China's foreign trade exports and imports increased by 26.1% and 21.2% respectively. What particularly introduces attention is that in 2021, the scale of China's imports and exports reached 6.05 trillion U.S. dollars in U.S. dollar terms, eight years after it first reached 4 trillion U.S. dollars in 2013, and crossed two steps of 5 trillion and 6 trillion U.S. dollars within the year to reach a historical high point.

Nov. 26, 2023, 2:44 a.m.

772Views

Pharmaceutical Industry Tax-Related Criminal Risk Report (2022)

The pharmaceutical industry is an important part of China's national economy. In recent years, the "4+7" centralized purchasing with quantity, "two-ticket system" and other reform measures continue to land, the pharmaceutical industry in the past multi-level distribution model collapsed, a large number of pharmaceutical sales companies transformed into CSO, CSP, CMO, CRO outsourcing service providers. However, subject to the established mode of product sales and benefit distribution, the problem of commercial bribery in the pharmaceutical industry is serious, and the emergence of new types of business provides new possibilities for profit arbitrage. The pharmaceutical industry presents the phenomenon of coexistence of false driving and commercial bribery, and false driving and bribery cases are implicated in each other. The complexity of tax-related criminal cases superimposed on the special background of the pharmaceutical industry highlights the importance of tax-related risk management and control in the pharmaceutical industry, and invoice management compliance remains the keyword for pharmaceutical enterprises to avoid criminal risk liability in 2022.
This report is compiled based on Huatax's in-depth observation of the pharmaceutical industry and profound summary of its experience in representing pharmaceutical enterprises in tax-related criminal cases in recent years, aiming to reveal the causes and characteristics of tax-related criminal risks in the pharmaceutical industry as well as the direction of the investigation and trial of the cases in 2022, and based on which, it puts forward targeted defense strategies and compliance suggestions with a view to providing references for the pharmaceutical enterprises in avoiding criminal risks and realizing their operation in compliance with the law.

Nov. 26, 2023, 2:26 a.m.

946Views

Recycling Industry Tax-Related Criminal Risk Report (2022)

The renewable resources industry is an important part of the circular economy and an important way to improve the quality of the ecological environment and realize green and low-carbon development. Recycling, as the core link of the renewable resources industry, undertakes the task of "convergence" and primary processing of various dispersed waste materials, which is an important means of realization and development guarantee of the circular economy. However, since 2008, the abolition of the waste materials recycling business unit sales of waste materials exemption from value-added tax policy, renewable resources recycling enterprises have been caught in the lack of input votes and bear a large value-added tax burden, enterprise income tax deduction before the tax vouchers difficult to obtain the predicament of false openings is also becoming more serious. Since 2016, a number of domestic regions have broken out one after another renewable resources recycling enterprises false opening criminal cases, upstream and downstream involved in many enterprises, and the amount of money involved in the case is huge, once the false opening charges are established, the enterprises and personnel involved in the case are required to bear serious criminal liability. With the closing of the "fight against fraud" special action, the six ministries and commissions of the normalization of the crackdown on the ground, in order to prevent the risk of fraudulent invoicing, many recycling enterprises choose to give up to obtain input invoices, full payment of VAT in the sales process, and homemade acquisition vouchers to account for the cost of accounting, which in turn gives rise to the cost of vouchers do not comply with the need to make up for the payment of corporate income tax, the tax risks of late fees. On December 30, 2021, the Ministry of Finance and the State Administration of Taxation ("SAT") jointly issued the Announcement on Improving VAT Policies on Comprehensive Utilization of Resources (Announcement No. 40 of the Ministry of Finance and the SAT of 2021), which stipulates that general taxpayers may choose the simplified tax method for the sales of renewable resources to calculate and pay the VAT according to the 3% levy rate, which will greatly alleviate the VAT burden in the recycling business. However, it is not clear how to deal with the deduction before enterprise income tax. Against this background, in order to enable the majority of renewable resources recycling and utilization enterprises to carry out tax management in compliance with the law, strengthen internal risk prevention and control and external risk isolation, and effectively respond to and resolve tax-related criminal risks, Huatax combines the successful experience of dealing with the cases of fraudulent invoicing in recent years to write this report, which provides an in-depth analysis on the tax environment of the renewable resources industry under the new situation of tax levy and administration, the key tax issues, the triggers of the tax-related criminal risks, and the compliance with the criminal risks, etc., with a view to providing a better solution for the renewable resources recycling business. This report analyzes the tax environment, key tax-related issues, tax-related criminal risk triggers, criminal risk compliance, etc. in the renewable resources industry under the new situation of tax collection and management, with a view to providing useful reference for renewable resources recycling enterprises.

Nov. 26, 2023, 1:43 a.m.

881Views

Scrap Material Industry Tax-Related Criminal Risk Report (2021)

Export tax rebate refers to a tax system whereby the State refunds to export enterprises the import tax on raw materials for exported goods, as well as indirect taxes such as value-added tax (VAT) and consumption tax (CST) that have already been paid at various stages of production and circulation in the country, so that exported goods can enter the international market and participate in international competition at a price that does not include indirect taxes. During the 13th Five-Year Plan period, according to the data released by the General Administration of Customs and the State Administration of Taxation, China's export trade volume totaled about 807,527,700,000,000 RMB, and the country handled a cumulative total of 7,073,600,000,000 RMB of export tax refunds, of which 1,454,900,000,000 RMB of export tax refunds were granted in the whole year of 2020, and the time of handling the export tax refunds has been speeding up and efficiency accelerated. Coupled with the successive implementation of paperless customs clearance by relevant departments, reform of the foreign exchange underwriting system, and facilitation of RMB settlement services for cross-border trade, the export tax rebate system has played an important supportive role for the development of the foreign trade industry and the generation of foreign exchange by export enterprises. In order to standardize the tax order, safeguard the dignity of the tax law, and curb the momentum of tax fraud and false invoicing crimes in the foreign trade industry, the state has always been in a high-pressure situation to crack down on fraudulent export tax rebates.In August 2018, the State Administration of Taxation (SAT), the Ministry of Public Security (MPS), the General Administration of Customs (GAC) and the People's Bank of China (PBOC) held a joint meeting in Beijing to deploy a two-year special action to crack down on the crimes of falsely issuing value-added tax (VAT) invoices and fraudulently obtaining export tax refunds. Two-year special action. As of January 2021, a total of 322,300 enterprises suspected of false invoicing and tax fraud have been investigated and dealt with, with a tax amount of about 85.015 billion yuan. Fraudulent export tax refund is a criminal offense with the heaviest criminal liability in the tax-related field, involving the most complicated transaction subjects and transaction links. In order to protect the security of national tax money, tax authorities in the tax collection and management, in line with the "who exports, who collects foreign exchange, who refunds, who is responsible for" principle, declared export tax rebates of foreign trade enterprises for the direct responsibility of the main body, whether the upstream enterprises flee, suspected of false openings, or upstream and downstream enterprises conspire with the foreign trade enterprises as a channel to fraudulent export tax refunds, the foreign trade enterprises are facing a more serious problem. Foreign trade enterprises are facing more serious criminal liability risks. The Report on Tax-Related Criminal Risks in Foreign Trade Industry (2021) is compiled by Huatax based on its in-depth observation of the foreign trade industry and the profound summary of its experience in representing foreign trade enterprises in tax-related criminal cases in recent years, with the aim of revealing the characteristics of the causes of the tax-related criminal risks in the foreign trade industry and the new direction of investigating and dealing with the cases of tax cheating in 2021, and on the basis of which, it puts forward the targeted defense strategies and compliance suggestions, with a view to providing a good opportunity for the foreign trade enterprises to avoid criminal risks and realize lawful and compliant operation. The report is divided into six parts. This report is divided into six parts, and the full text is about 15,000 words.

Nov. 28, 2023, 11:08 a.m.

810Views

Coal Industry Tax-related Criminal Risk Report (2021)

Coal is the backbone of China's traditional industry. Although the State has implemented a series of regulatory systems for the coal industry, such as the quota system, mining, production and operation licensing system (the operation licenses have now been abolished), irregularities in the operation process of coal enterprises still exist and give rise to the risk of criminal liability, which not only leads to the enterprises being caught in operational difficulties, but also puts a number of entrepreneurs behind bars. There is no lack of tax-related cases in these criminal cases. Tax-related criminal cases have become the "Sword of Damocles" hanging over the heads of enterprises and entrepreneurs due to the low threshold of criminalization and heavy criminal liability. However, in these tax-related criminal cases, not all the defendants have the subjective intention of false opening, tax fraud, tax evasion, but due to the business process of some non-compliance operation led to the objective criminal behavior. It is worthwhile for enterprises and entrepreneurs to be alerted to such cases. Compliance Report on Tax-Related Criminal Risks in Coal Industry (2021) is a thematic report based on Huatax's in-depth observation of the coal industry and profound summary of its experience in representing coal enterprises in tax-related criminal cases, aiming to reveal the current situation of tax-related criminal risks in the coal industry, their causes, and to put forward defense strategies and compliance recommendations, with a view to providing references for coal enterprises to avoid criminal risks.

Nov. 20, 2023, 1:29 p.m.

798Views

Foreign Trade Industry Tax-related Criminal Risk Report (2021)

Export tax rebate refers to a tax system whereby the State refunds to export enterprises the import tax on raw materials for exported goods, as well as indirect taxes such as value-added tax (VAT) and consumption tax (CST) that have already been paid at various stages of production and circulation in the country, so that exported goods can enter the international market and participate in international competition at a price that does not include indirect taxes. During the 13th Five-Year Plan period, according to the data released by the General Administration of Customs and the State Administration of Taxation, China's export trade volume totaled about 807,527,700,000,000 RMB, and the country handled a cumulative total of 7,073,600,000,000 RMB of export tax refunds, of which 1,454,900,000,000 RMB of export tax refunds were granted in the whole year of 2020, and the time of handling the export tax refunds has been speeding up and efficiency accelerated. Coupled with the successive implementation of paperless customs clearance by relevant departments, reform of the foreign exchange underwriting system, and facilitation of RMB settlement services for cross-border trade, the export tax rebate system has played an important supportive role for the development of the foreign trade industry and the generation of foreign exchange by export enterprises. In order to standardize the tax order, safeguard the dignity of the tax law, and curb the momentum of tax fraud and false invoicing crimes in the foreign trade industry, the state has always been in a high-pressure situation to crack down on fraudulent export tax rebates.In August 2018, the State Administration of Taxation (SAT), the Ministry of Public Security (MPS), the General Administration of Customs (GAC) and the People's Bank of China (PBOC) held a joint meeting in Beijing to deploy a two-year special action to crack down on the crimes of falsely issuing value-added tax (VAT) invoices and fraudulently obtaining export tax refunds. Two-year special action. As of January 2021, a total of 322,300 enterprises suspected of false invoicing and tax fraud have been investigated and dealt with, with a tax amount of about 85.015 billion yuan. Fraudulent export tax refund is a criminal offense with the heaviest criminal liability in the tax-related field, involving the most complicated transaction subjects and transaction links. In order to protect the security of national tax money, tax authorities in the tax collection and management, in line with the "who exports, who collects foreign exchange, who refunds, who is responsible for" principle, declared export tax rebates of foreign trade enterprises for the direct responsibility of the main body, whether the upstream enterprises flee, suspected of false openings, or upstream and downstream enterprises conspire with the foreign trade enterprises as a channel to fraudulent export tax refunds, the foreign trade enterprises are facing a more serious problem. Foreign trade enterprises are facing more serious criminal liability risks. The Report on Tax-Related Criminal Risks in Foreign Trade Industry (2021) is compiled by Huatax based on its in-depth observation of the foreign trade industry and the profound summary of its experience in representing foreign trade enterprises in tax-related criminal cases in recent years, with the aim of revealing the characteristics of the causes of the tax-related criminal risks in the foreign trade industry and the new direction of investigating and dealing with the cases of tax cheating in 2021, and on the basis of which, it puts forward the targeted defense strategies and compliance suggestions, with a view to providing a good opportunity for the foreign trade enterprises to avoid criminal risks and realize lawful and compliant operation. The report is divided into six parts. This report is divided into six parts, and the full text is about 15,000 words.

Nov. 20, 2023, 1:32 p.m.

739Views