Recently, the King&Capital team of lawyers, consisting of Jinling Men, Yujie Xu and Mingzhen Li, successfully defended the client in a case of fraudulent export tax rebate and illegal sale of VAT invoices, and in the Procuratorate stage, they succeeded in the reverse articulation of the sentence to remove one of the alleged charges, and prosecuted the case only for the crime of illegal sale of VAT invoices, and reached a plea bargaining agreement. Court stage of reasoned argument, after the lawyer team's professional defense, finally, the judge sentenced the party K to probation, greatly safeguard the interests of the parties, and firmly built the private entrepreneurs, private enterprises, economic development of the dam.
First, the execution and punishment of the reverse convergence, the allegation of fraudulent export tax rebates back to the administrative penalties
For the allegation of fraudulent export tax rebates, the indictment states: “K Mou's company collects the payment of goods and sea freight, in order to cheat export tax rebates, K Mou instructed the company's export trade operator to modify the unit price of some goods, the sea freight will be included in the payment of goods together with the declaration of the tax rebate, a total of 1072,656.45 U.S. dollars of sea freight will be included in the payment of goods for the declaration of the tax rebate, the tax department accounting, a total of fraudulent export tax rebates. department's accounting, the total amount of fraudulent export tax refunds amounted to RMB 893,958.89 yuan.” The above charges in the indictment, in addition to “for fraudulent export tax rebates”, the other facts are basically clear and the evidence is sufficient.
(i) Actively communicating with the Procuratorate as to whether or not it falls within the second paragraph of Article 204 of the Criminal Law
The second paragraph of Article 204 of the Criminal Law stipulates that “If a taxpayer, after paying tax, adopts the deceptive methods stipulated in the preceding paragraph to cheat the tax paid, he shall be convicted and punished in accordance with the provisions of Article 210 of this Law; and the part of the tax cheated that exceeds the tax paid shall be punished in accordance with the provisions of the preceding paragraph.” Fraudulent export tax rebate for the tax paid, to the crime of tax evasion.
At that time, has not yet been issued “the supreme people's court supreme people's procuratorate on the handling of criminal cases of endangering the tax collection and management of the application of law on a number of issues of interpretation”, the defense lawyer mainly want to use the second paragraph of article 204 to persuade the prosecutor will be K a certain behavior to the theory of tax evasion. K a certain company is a large taxpayer, input tax is very high, the allegation of amount of input tax in the amount of the percentage of its input tax is very small, K a certain company employees up to more than five hundred, are relying on K a large meal, and the company is also a large company, and the company is not a large company. All rely on K to eat, this is the defense of the biggest argument. In addition, the incident occurred between the epidemic, K a company in order to goods out of Hong Kong, no choice but to bear the cost of finding containers for transportation, but also orally and foreign representatives mentioned to raise the price of goods will be included in the cost of freight, the epidemic to help find containers and find a ship out of Hong Kong, there is no illegal possession for the purpose of fraudulent tax rebates, just want to level the cost of the epidemic through the difficult times.
(ii) Comprehensive and detailed organization of the input tax of K a company and the payment of employee wages and benefits
The defense must be based on facts and speak with evidence. The team members deployed a total of five people, spent a week, detailed collation of K a company of the tax year all input tax, as well as its name of the enterprise more than 500 employees' wages and benefits issued. Because K company is an export enterprise, so the accounts and bills are all complete.
After the last communication with the prosecutor, when submitting the evidence again, the prosecutor was asked to talk about the defense and try to persuade the case to be returned to the tax authorities, so that the infringed legal interests could be restored, so that K Mou could get a lesson, and also to make sure that the enterprise was free from any danger, and the life of the enterprise's more than 500 employees could be continued without any interruption.
(iii) Submission of detailed written arguments
Our trial is essentially a written trial, need to go to the meeting, need to report, in order to let the real decision makers know the original appearance of the defense opinions, each defense point of view in the oral expression of the completion of the detailed written materials submitted. Written opinion is different from oral expression, need rigorous logic and legal interpretation of argumentation skills.
Combined with the facts of the case, from the normative and factual levels around: (1) “real export” and “false export” to explain and argue; (2) the “loss of state tax” in the (2) the status and significance of “loss of national tax money” in tax-related crimes was analyzed from the perspective of defense; (3) the administrative penalty for tax evasion was analyzed at the legislative level; (4) combined with the provisions of the “Norms for the Administration of Export Refunds (Exemptions) by the National Tax Authorities (Version 2.0)” (No. 48 of the General Administration of Taxation [2018]), it was argued that the acts in this case should be subject to the administrative penalties under the meaning of this provision. The defense attorney submitted a total of 35 pages of arguments.
The prosecutor of this case is also a prosecutor who has the responsibility, can dialogue, and is very concerned about the trend of judicial reform, communication, he took the initiative to mention the ongoing tax-related judicial interpretation for the purpose of mitigating penalties, defense lawyers once again submitted argumentative opinions, specifically collected and collated the judicial interpretation of the “legislative” process of the relevant information, it will also be written into the argumentative opinions. It is also written into the argument.
(D) communication with the investigating authorities
When the prosecutor loosens his grip, the defense will be able to communicate with the investigating authorities. In the prosecutor has loosened, defense lawyers actively communicate with the investigating authorities to transfer the case, personally go to the police in charge of the investigation of this case to communicate the views of this case, the scope of the discussion, including but not limited to the second paragraph of Article 204 of the Criminal Law “paid taxes” means into the treasury will no longer occur. The scope of the discussion included, but was not limited to, whether the “tax paid” in the second paragraph of Article 204 of the Criminal Code refers to the tax that goes to the State Treasury and is no longer subject to “retention and refund”, or whether the VAT is a tax that is subject to retention and refund. After all-round communication, agreement was reached.
(E) The New Tax-Related Judicial Interpretation was issued.
The allegation of fraudulent export refunds returned to the tax authorities, the case entered the court stage, March 20, 2024 introduced the “Supreme People's Court Supreme People's Procuratorate on the handling of criminal cases of endangering the tax collection and management of the Interpretation of Several Issues on the Application of Laws” (referred to as the “new tax-related judicial interpretations”), which stipulates that Article 7: with one of the following circumstances shall be deemed to be the criminal law Article 204, paragraph 1 of the provision of the “False export declaration or other deceptive means": ...... (4) Although there is an export, but fictitious name, quantity, unit price and other elements of the refundable export business, in order to inflate the amount of export tax refund declaration of export tax refund; (8) other deceptive means of fraudulent export tax refunds .” The introduction of this interpretation clarifies that the second paragraph of Article 204 of the Criminal Law may be applicable in this case. In this case, K has never had other tax-related administrative penalties, this case is a special situation during the epidemic, therefore, 35 pages of argumentative opinions combined with relevant regulations to argue in detail that this case to take the road of the reverse articulation of execution and punishment is more clear, but also to make the organizing prosecutor for the return of the decision of the administrative organs more assured.
Second, the illegal sale of special invoices for value-added tax, guilty plea, suspended sentence
After knocking off one of the two crimes, the prosecutor's office only charged the court with the crime of illegally selling VAT invoices, and the indictment contained the following: “The company where K is located carries out international business with other companies, and in the above business activities, due to the existence of some of its sales subordinates who do not need to issue VAT invoices, which resulted in the existence of input VAT invoices in surplus in K's company, and by charging an invoicing fee of 2-3% of the face amount to sell 117 VAT invoices to other invoice-buying companies, with a total face amount of RMB 5,862,962.09, and making a profit of RMB 1,434,435.87 from them.” Combined with the alleged facts and evidence in this case, the overall defense strategy is to plead guilty and go on probation, specific allegations of each (117) facts, one by one, list and analyze, according to the law does not constitute a crime part of the still do not guilty plea, the facts are clear part of the defense from the less harmful to start.
(I) Organize the transactions related to the 117 VAT invoices charged
The team members gathered together to comprehensively organize the alleged 117 VAT invoices for sale. According to the needs of the elements of the crime, they were typed into three cases: “letter of credit transaction mode”, “issued by the issuing company” and “issued by K's own company”. According to the needs of the defense argument, the 117 invoices corresponding to the buyer, seller, trade mode, goods and other related documents.
(B) drafting defense opinions, for the prosecution and defense dialogue to prepare for the heart of the evidence
Communication with the prosecutor must have a full understanding of the facts of the case, and the inner logical self-consistent defense framework, the process of writing defense opinions is the process of forming a defense strategy.
Combined with the facts and evidence of the case, the defense mainly around:
First, the “letter of credit transaction mode” essence of “financing on behalf of the purchase”, K no profit. The profit from the sale of the invoices corresponds to all the expenses of borrowing the letter of credit from the state-owned enterprise (which is actually “financing on behalf of the buyer”), which proves that there is no profit. Illegal sale of VAT invoices must be for profit. The defense fully argues that the model is actually “dependence” and “financing on behalf of the purchase” between the economic behavior, K need to pay the state-owned enterprises to open the letter of credit fee 6 ‰ (each), but also need to contract the amount of funds of the bank interest (7.2% per annum) calculated on a daily basis And pay the state-owned enterprises funds occupation costs, the state-owned enterprises advance and control goods. Subjectively, K is trying to fill the expenses, non-profit-making, and objectively no profit-making.
Secondly, it is fully argued that the invoices issued by the issuing company, objectively no loss of state tax, and there are invoices that can match the specific real transactions. The VAT invoices issued by the state-owned enterprises recorded the goods, quantity and price are in line with the actual transactions that really happened, and only one of the invoicee should not be recognized as “no real transaction”, and every single transaction can be “located” by a certain invoice and some of the invoices are not deductible and some of them are not refundable. Every single transaction could be “located” by a certain invoice, and some of the invoices were not deductible, some had no evidence of payment back, and the total tax of all the alleged invoices was within K's input tax, which objectively belonged to no loss of state tax. This part should not constitute the crime of selling professional VAT invoices and there is no suspicion of tax evasion.
Thirdly, for the 14 invoices issued by K's own company, of which 4 had no evidence of fund return and one had not been offset, none of the tax involved exceeded its input tax amount, and objectively there was no loss of state tax, so the threshold of criminal punishment had not yet been reached, and the crime should not be incriminated.
The defense argues in detail that even if we want to discuss whether the part issued by K's own company is suspected of incrimination, we should also discuss the possibility that the invoice can not specifically locate the transaction, resulting in the state for the volume of the transaction may be out of control. The more objective the defense opinion is, the more it can impress the case officer. Value-added tax as a commodity turnover tax, the way it is collected is each link invoiced that is levied, that is levied that is refunded, combined with the “retention against refund” policy to fully justify the total amount can be determined in the input, it is excluded from the suspected value-added tax crime.
(C) communicate with the prosecutor, plead guilty and apply suspended sentence
K as a private entrepreneur, his greatest interest is the urgent need to return to the mall, at this time, his time is the life of the enterprise. Repeatedly communicate down, sincere, the prosecutor agreed to apply probation to K and the other two employees in the same case. Initially talked about the probation of K is sentenced to three suspended five, in accordance with the probation of the top of the signed plea agreement.
(iv) Aggressive defense at the court stage and probation in court
Although in the court stage of the program generally will not modify the sentencing recommendations, but one day did not get the effective sentence, can not be relaxed for a moment.
The case to the court stage, defense lawyers take the initiative to dock the court in a timely manner, and actively output defense opinions, the judge to understand the whole case also did not express the intention to oppose, but also coincided with the stage of the court, just the “new tax-related judicial interpretations”, the need for the prosecutor to change the indictment allegations, through this, and further communication with the prosecutor, the guilty plea to a statement of acceptance to a probationary sentence of a suspended sentence of three suspended four. The court pronounced the sentence.
Thus, the defense lawyer in this case from July 2023 to take over the case, to April 2024 sentencing, a full nine months of time, countless times with the prosecutor, the investigators, the judge to communicate with the prosecutor, the investigators, the judge, from the fraudulent export tax rebates and illegal sale of VAT invoices two charges, suspected of statutory penalties of more than 10 years, to the final court sentence of probation, the dust settles, the private enterprise can continue to operate, more than 500 employees The lives of more than 500 employees were not interfered with, and the legal interests to be protected by the criminal law were restored. K was also subjected to certain restrictions on his personal freedom, punished economically and duly educated.
In recent years, there have been frequent tax-related cases, especially in the field of value-added tax (VAT), and it is undeniable that if a company disrupts the order of tax collection and management to a certain extent through administrative errors, regardless of the method of export tax rebates, but the core should also look at whether the national tax revenues have been lost.In March 2019, the “Announcement of the Ministry of Finance, the State Administration of Taxation, and the General Administration of Customs, No. 39 of 2019 “In April 2022, the Ministry of Finance and the State Administration of Taxation (SAT) once again issued the “Announcement on Further Increasing the Implementation of the Policy of VAT End-of-Period Allowance Refund,” reiterating that for enterprises with high input tax and low output tax, the end-of-period allowances will be refunded. Tax Refund. This fully indicates that for VAT-related crimes, the loss of national tax is the underlying logic. The new judicial interpretation on tax-related cases also aims to regulate leniency. In essence, the purpose of tax collection and management is to escort the national economy, and crimes against tax collection and management belong to typical administrative crimes, so as to prevent the rigidity of a single amount of standard judgment, and to realize the appropriateness of crime and punishment according to the different circumstances of the cases, and even more so, it is not possible to easily “kill” the taxpaying households, and it is legally possible to punish the irregularities of the enterprises and entrepreneurs by means of administrative penalties. Entrepreneurs can be punished by means of administrative penalties for irregularities, prudent criminalization, so that it can continue to create tax revenue is the purpose of the criminal law, is the high degree of unity of political effect, social effect and legal effect.
King&Capital lawyers, in the protection of private enterprises and the rights and interests of private entrepreneurs spared no effort, but also hope that through the legal profession, to strengthen the citizens in accordance with the law tax awareness, to help enterprises to comply with the law, and to promote the benign development of the economy.
