Up to now, in order to correctly try the case of false issuance of special VAT invoices, the Supreme People's Court has issued three replies (two in 2001 and one in 2015), a summary of the symposium (2004) and a typical case (Zhang Mouqiang in 2018), but has not yet issued a judicial interpretation. Based on this, disputes still exist in practice, and the phenomenon of different judgments in the same case still exists. However, the following false issuance situations do not constitute the crime of false issuance of special VAT invoices, and a consensus can be basically reached.
1. False tax issuance is not a crime
(1) Common practical cases
For the purpose of cashing out at a low cost or for the purpose of paying less individual income tax, a person who falsely issues a special invoice but the amount of tax falsely issued is less than 10,000 yuan, does not constitute the crime of falsely issuing a special VAT invoice.
(2) Basis
Article 56 of the "Provisions of the Supreme People's Procuratorate and the Ministry of Public Security on the Standards for Filing and Prosecution of Criminal Cases under the Jurisdiction of Public Security Organs (II)" dated May 15, 2022: [Case of False Issuance of Special VAT Invoices for Fraudulent Obtaining of Export Tax Rebates and Tax Deductions (Article 205 of the Criminal Law)] Where the amount of tax falsely issued is more than 100,000 yuan or the amount of tax losses caused to the state is more than 50,000 yuan, a case shall be filed for prosecution.
2. Opening the open loop is not a crime
(1) Common practical cases
In order to inflate turnover, expand sales revenue, and create false prosperity, the company and other companies open and ring special VAT invoices.
(2) Basis
The Supreme People's Court replied to the [2001] Xing Ta Zi No. 36 Supreme People's Court to the Hubei Provincial High People's Court's request for instructions on the case of false issuance of special VAT invoices by Hubei Automobile Mall. After soliciting opinions from the Legislative Affairs Committee of the Standing Committee of the National People's Congress, the State Administration of Taxation and other relevant departments, and convening some criminal law experts to conduct argumentation, the adjudication committee of the Supreme People's Court discussed and reached a unanimous opinion that the act of false billing, which subjectively does not have the purpose of tax evasion and objectively does not actually cause the loss of state tax revenue, does not constitute a crime.
Minutes of the Symposium of the Supreme People's Court: In 2004, the Supreme People's Court held a meeting in Suzhou to form the Minutes of the Symposium on the Trial of Economic Crime Cases, and reached a consensus on the determination of "false issuance of special VAT invoices": subjectively it is not for the purpose of tax evasion, and objectively it will not cause the loss of national tax revenue, so it should not be recognized as a crime. It clearly mentions that in practice, for the act of issuing special VAT invoices to each other or in a ring for the purpose of inflating turnover, expanding sales revenue or creating false prosperity, it is generally not appropriate to find it a crime of false issuance of special VAT invoices.
3. Inflating sales performance is not a crime
(1) Common practical cases
In order to meet the needs of financing and other needs, the company falsely increased the sales performance of the false expense invoices, and at the same time falsely received the corresponding input invoices, but did not cause the loss of national taxes. or through the open and ring opening methods, no national tax loss has been caused
(2) Basis
Minutes of the Symposium of the Supreme People's Court: The Minutes of the Symposium on the Trial of Economic Crime Cases, which was formed by the Supreme People's Court in 2004 at a meeting held in Suzhou: Subjectively it is not for the purpose of tax evasion, and objectively it will not cause the loss of state tax revenue, so it should not be recognized as a crime. It is clearly mentioned that, in practice, in the process of selling goods, in order to exaggerate the sales performance of general taxpayers, falsely increase the sales links of goods, falsely issue special input VAT invoices and output VAT special invoices, but the payment of VAT in accordance with the law has not caused a loss of state tax, it is generally not appropriate to find that it is a crime of false issuance of VAT special invoices.
Fourth, the inflated assets do not constitute a crime
(1) Common practical cases
In order to exaggerate the economic strength of the enterprise, the company falsely increased the assets (fixed assets, etc.) of the enterprise by falsely issuing special input VAT invoices, but did not use the special VAT invoices to deduct taxes, and the state taxes were not lost.
(2) Basis
1. Reply 2 of the Supreme People's Court: In 2001, the Supreme People's Court replied to the Fujian Provincial High People's Court's request for instructions in the case of Quanzhou Songyuan Jindi Industrial Co., Ltd. and others falsely issuing special VAT invoices, the Supreme People's Court held that although the company had falsely issued special VAT invoices, it was not for the purpose of deducting taxes, but for the purpose of increasing the value of the purchased equipment and showing the strength of the company, so as to achieve the purpose of being in a favorable position in cooperation and negotiation with others. According to the provisions of the national tax law, the special VAT invoice indicated as a fixed asset cannot be deducted from the tax, and the company has not used the deduction copy, the state tax will not suffer losses due to its behavior, and the company's behavior does not have serious social harm, so it does not constitute a crime.
2. Minutes of the Symposium of the Supreme People's Court: The Minutes of the Symposium on the Trial of Economic Crime Cases formed by the Supreme People's Court at a meeting held in Suzhou in 2004: Subjectively it is not for the purpose of tax evasion, and objectively it will not cause the loss of state taxes, so it should not be recognized as a crime. It is clearly mentioned that in practice, in order to exaggerate the economic strength of the enterprise, the fixed assets of the enterprise are falsely increased by falsely issuing special input VAT invoices, but the special VAT invoices are not used to deduct taxes, and the state tax has not suffered losses, it is generally not appropriate to find the crime of false issuance of special VAT invoices.
5. Truthfully acting on behalf of others does not constitute a crime
(1) Common practical cases
The seller cannot issue a special VAT invoice on its own, so borrowing another company's company to truthfully issue an invoice to the buyer, and the seller does not constitute the crime of falsely issuing a special VAT invoice.
(ii) Basis
1. Guiding Cases of the Supreme People's Court: On December 4, 2018, the Supreme People's Court issued the second batch of typical cases of the people's courts giving full play to their adjudication functions to protect property rights and the legitimate rights and interests of entrepreneurs, People's Republic of China the Supreme People's Court's (2016) Supreme People's Court Criminal Judgment No. 51732773, and Zhang Mouqiang's false issuance of special VAT invoices: Zhang Mouqiang signed a sales contract in the name of the company, and the company collected the payment and issued the special VAT invoice, which did not have the purpose of defrauding the state of taxes. If it does not cause a loss of state tax revenue, its behavior does not constitute the crime of false issuance of special VAT invoices.
2. Reply 3 of the Supreme People's Court: Reply of the Research Office of the Supreme People's Court on How to Determine the Nature of the Conduct of Carrying out Business Activities in the Name of "Affiliated" Relevant Companies and Allowing Relevant Companies to Falsely Issue Special VAT Invoices for Themselves, dated June 11, 2015 (Fa Yan [2015] No. 58):
Where the actor engages in business activities in the name of another person and issues a special VAT invoice in the name of another person, even if there is no affiliation relationship between the actor and the other person, if the actor conducts actual business activities and subjectively does not have the intention to defraud the deduction of taxes, and objectively does not cause a loss of state value-added tax, it should not be found to be "false issuance of special VAT invoices" as provided for in article 205 of the Criminal Law; Where the requirements for constituting other crimes such as tax evasion are met, they may be punished for other crimes.
6. Affiliation and invoicing do not constitute a crime
(1) Common practical cases
Li Si is affiliated with the company (or online freight platform) engaged in truck transportation, and signs a transportation contract in the name of the company, and the company collects freight and issues special VAT invoices.
If Li Si actually provides truck transportation to the drawee in the form of affiliation, and the company issues a special VAT invoice to the drawee, it does not belong to the "false issuance of special VAT invoices" as provided for in Article 205 of the Criminal Law.
(ii) Basis
1. Tax bureau documents: The announcement of the State Administration of Taxation on issues related to the issuance of special VAT invoices by taxpayers (Announcement No. 39 of 2014 of the State Administration of Taxation) stipulates that if the anchoring party actually sells goods to the recipient in the form of affiliation, and the affiliated party issues a special VAT invoice to the recipient, it is not a false issuance.
2. Reply 3 of the Supreme People's Court: "Reply of the Research Office of the Supreme People's Court on How to Determine the Nature of the Conduct of Carrying out Business Activities in the Name of "Affiliated" Relevant Companies and Allowing Relevant Companies to Falsely Issue Special VAT Invoices for Themselves" (Fa Yan [2015] No. 58): Where the affiliated party actually sells goods to the recipient in the form of affiliation, and the affiliated party issues a special VAT invoice to the recipient, it does not fall under the "false issuance of special VAT invoices" as provided for in Article 205 of the Criminal Law.
7. Ignorance (e.g., the name of the company) does not constitute a crime
(1) Common practical cases
If Zhang San is the legal representative of the company, does not participate in the operation and management of the company, and is not aware of the company's false issuance of special VAT invoices, then Zhang San is not the person in charge and other directly responsible personnel of the company for the crime of falsely issuing special VAT invoices, and it does not constitute the crime of false issuance of special VAT invoices.
(ii) Basis
Minutes of the National Symposium on the Trial of Financial Crime Cases by Courts, January 21, 2001, issued by the Supreme People's Court: Determination of the person in charge and other persons directly responsible for the crime of the unit: The person in charge who is directly responsible is the person who plays a role in deciding, approving, instructing, conniving, directing, etc., in the crime committed by the unit, and is generally the person in charge of the unit, including the legal representative. Other directly responsible personnel are persons who specifically commit crimes in the unit and play a larger role, and may be both the unit's business management personnel and the unit's employees, including those hired or employed. It should be noted that in the case of crimes committed by units, it is generally not appropriate for persons who have been appointed or ordered by the leaders of the unit to participate in the commission of certain criminal acts to be pursued for criminal responsibility as directly responsible personnel.
Source: Case study of criminal defense and civil litigation, WeChat public account of "Zhang San, a natural criminal", Jilin Public Security Legal System. The content of this article is for general information purposes only and is not intended as formal auditor, accounting, tax or other advice, and we cannot guarantee that such information will remain accurate in the future. No person should act on the basis of the information contained herein without having due regard to the relevant circumstances and obtaining appropriate professional advice. The articles reproduced in this issue are for academic exchange purposes only. The original copyright of the article or material belongs to the original author or original copyright owner, and we respect copyright protection. If you have any questions, please contact us, thank you!