Recently, according to the official website of the Guangdong Provincial Taxation Bureau of the State Administration of Taxation, a company in Zhongshan owed more than 229 million yuan in tax payable, and was fined more than 229 million yuan by the tax authorities by transferring property to prevent the tax authorities from recovering taxes.
In 2024, the Supreme People's Court and the Supreme People's Court promulgated new judicial interpretations on tax crimes further clarified the specific circumstances of "adopting means of transferring or concealing assets". The penalties imposed by the tax authorities and judicial authorities may become more and more stringent for enterprises to evade the collection of tax arrears, and enterprises should be alert to relevant legal risks and make compliance responses in advance.
1. Relevant laws and regulations on evasion of tax arrears
Article 50 of the Tax Administration Law stipulates the right of tax subrogation and revocation, Article 65 stipulates that the tax authorities may impose a fine of 0.5 times to 5 times for the act, and Article 203 of the Criminal Law stipulates the crime of evading the recovery of tax arrears, as follows:
In practice, there have been cases in which the tax authorities have successfully recovered the tax by exercising the right of tax subrogation, such as the case of the Qingdao tax inspection department exercising the right of subrogation to recover the tax arrears of the lost household. Through public searches, only 115 cases of "evading the crime of tax arrears" were found. However, in practice, there are many cases in which enterprises evade the collection of tax arrears, and only a small number of them are held criminally liable. This may be due to the fact that the provisions of Article 203 of the Criminal Law are relatively general, and it is difficult to determine "the means of transferring or concealing assets". Now that the new judicial interpretation has made clear and detailed provisions on this conduct, more enterprises may face the risk of criminal liability in the future.
2. Typical case: A case of a company in Beijing evading the recovery of tax arrears
Basic facts of the case:
Defendants Chen and Gong jointly invested in the establishment of Company A in 2006. In 2007 and 2012, Company A successively established the first branch and the second branch. On September 9, 2014, the State Taxation Bureau of Shunyi District issued an administrative decision, determining that Company A had not obtained legal and valid vouchers for expenditure, and should pay a total of 923,350.35 yuan of enterprise income tax from 2012 to 2013, and paid a late fee, and Company A failed to pay the tax within the specified time.
On September 29, 2014, the defendants Chen and Gong registered and established Company B on September 29, 2014, knowing that the Shunyi District State Taxation Bureau had conducted a tax inspection on Company A, made a tax treatment decision and recovered taxes, and B established Company C at the business address of the first branch and Company D at the business address of the second branch, and the first and second branches continued to operate in the name of Companies C and D.
On March 5, 2015, Company A cancelled the first and second branches. At the same time, Company A took advantage of the cooperative operation relationship with a hotel to issue invoices for a hotel when it operated externally, and no longer applied for invoices since January 2015. Company A's account will no longer be used after it is frozen. Company A evaded the recovery of taxes by the Shunyi District State Taxation Bureau through the above methods, and at the time of the case, there were still more than 820,000 yuan of taxes that could not be recovered.
Referee Result:
The defendant company A and its directly responsible managers, the defendants Chen and Gong, owed the tax payable and adopted the means of transferring and concealing the property, so that the tax authorities could not recover the outstanding tax amount, and the amount was more than 100,000 yuan, and their conduct constituted the crime of evading the recovery of tax arrears, and should be punished.
1. The defendant company A committed the crime of evading the recovery of tax arrears and was sentenced to a fine of RMB 850,000 (the fine shall be paid within 10 days from the effective date of the judgment).
2. Defendant Chen X committed the crime of evading the recovery of tax arrears, and was sentenced to three years imprisonment with a three-year suspended sentence and a fine of RMB 850,000 (the probationary period of the suspended sentence is calculated from the date on which the judgment is determined; the fine is to be paid within 10 days of the effective date of the judgment).
3. Defendant Gong X committed the crime of evading the recovery of tax arrears, and was sentenced to three years imprisonment with a three-year suspended sentence and a fine of RMB 850,000 (the probationary period of the suspended sentence is calculated from the date on which the judgment is determined; the fine is to be paid within 10 days of the effective date of the judgment).
3. Case enlightenment and risk warning
In this case, there are the following key points in determining the act of "transferring or concealing assets":
First, the company has the ability to pay taxes. The company's relevant annual tax returns, account transaction details, etc., can prove that Company A is operating normally and has sufficient liquidity, and Company A does not have the situation that Company A cannot pay taxes on time due to "special difficulties" as stipulated in the Law of the People's Republic of China on the Administration of Tax Collection and Collection and the Detailed Rules for the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection, and can apply for an extension of payment. Therefore, Company A should pay taxes within the prescribed time limit.
Second, Company A carried out the act of transferring and concealing assets to evade the payment of tax arrears. It is mainly embodied in the following aspects: 1. The establishment of Company B, the establishment of a new company in the name of the company, and the cancellation of the original branch, on the basis of continuing to control the original branch and ensuring the continued operation of the original branch, the legal relationship of the new company is separated from the original branch, and the tax owed by the original branch is no longer born; 2. The funds in the accounts of Company A and its first and second branches are continuously transferred out within two months after the tax authorities issue the tax treatment decision, and the account balance plummets from millions of yuan to more than 80,000 yuan. The above-mentioned acts occurred during the period of tax inspection, demand for back payment of taxes and recovery of tax arrears, and it is difficult to explain them by "normal business conduct". Through the above methods, Company A can continue to operate by using the cooperative operation of a hotel, deactivate the company's account, and no longer apply for invoices from the tax authorities, so that Company A (the first branch and the second branch) can continue to operate, but the tax authorities cannot recover the taxes.
Third, the crime of evading the recovery of tax arrears is constituted, and the tax authorities are not required to "exhaust all means" to recover the tax arrears and cannot be recovered. Although the Law of the People's Republic of China on the Administration of Tax Collection and Collection stipulates that the tax authorities may freeze and withhold accounts, seize and seize auctioned property, etc., and even exercise the right of subrogation and revocation to achieve compulsory tax collection, this is the authority granted by the law to the tax authorities, and the tax authorities can choose what kind of collection measures to take according to the actual situation.
With regard to "the adoption of means of transferring or concealing property", the new judicial interpretation stipulates that: "(1) waiver of due creditor's rights, (2) transfer of property free of charge, (3) transaction at an obviously unreasonable price, (4) concealment of property, (5) failure to perform tax obligations and separation from the supervision of the tax authorities, and (6) transfer or concealment of property by other means". The conditions for exercising the right of tax subrogation are: "the taxpayer is negligent in exercising the due creditor's rights, or waives the due creditor's rights, or transfers the property free of charge, or transfers the property at an obviously unreasonable low price, and the transferee knows about the situation, causing damage to the state tax revenue".
The difference between the above two provisions is that "taking means of transferring or concealing property" provides for active transfer and concealment, while "negligence in exercising due creditor's rights" is a passive act. After the enterprise owes taxes, if it only passively does not exercise its creditor's rights, it will only face administrative liability, and generally will not involve criminal liability. After the enterprise owes taxes, if the shareholders withdraw their capital contributions, give up their due creditor's rights, and set up a new company to transfer their assets, they are likely to face criminal liability, and the enterprise should be vigilant against such risks and do a good job in compliance with the corresponding work.
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