Editor's Note: With the deepening of the "streamline administration, delegate power, strengthen regulation and improve services" reform, the procedures for deregistration of enterprises have been continuously optimized, making it more efficient and convenient to withdraw from the market. However, in practice, some enterprises evade their tax obligations by means of false reporting and cancellation of registration. Recently, State Taxation Administration of The People's Republic of China disclosed two cases of "escape cancellation" for the first time. In addition, the liquidation income generated in the cancellation process is also easy to be ignored, and cases of non-transaction transfer without tax payment are not uncommon. This paper analyzes the tax obligations that enterprises should pay attention to when they cancel, and further discusses the recovery of tax owed by cancelled enterprises for readers' reference.
I. Practical case: recovery of tax arrears from shareholders of cancelled enterprises and restoration of tax registration.
With the revision of the Company Law and the improvement of relevant supporting laws and regulations, for cancelled enterprises that fail to fulfill their tax declaration obligations according to law and owe taxes, in practice, the tax authorities either recover taxes and late fees from shareholders on the basis of the commitment to clear taxes, or jointly cancel the cancellation registration and restore the tax registration with the municipal supervision department, and recover taxes and late fees from the company. If the relevant personnel such as enterprises and shareholders are suspected of criminal offences before cancellation, they will continue to be investigated for criminal responsibility.
(i) according to the cancellation of the commitment issued by the shareholders to clear taxes, to recover taxes and late fees from shareholders.
On March 8, 2025, the Inspection Bureau carried out tax inspection on the enterprises involved in the case of accepting false invoices, and determined that the company used false invoices for value-added tax, resulting in less tax payment, which was characterized as tax evasion. Because the company cancelled its industrial and commercial registration on March 17, 2025, the inspection bureau determined that three shareholders of the company defrauded the cancellation of registration with a false liquidation report based on the promise of "there is no unpaid tax payable" signed during liquidation, and asked the three shareholders to bear the unpaid tax and late payment fees in proportion to their capital contribution.
(ii) the tax authorities jointly with the municipal supervision department to cancel the cancellation of industrial and commercial registration and resume tax registration to recover taxes.
In September this year, State Taxation Administration of The People's Republic of China announced two "escape" cancellation tax evasion cases. After the two companies involved in the case were cancelled after concealing their income and evading taxes, the tax department, in conjunction with the market supervision and management department and the administrative examination and approval service department, revoked the cancellation of the industrial and commercial registration of the two companies and resumed the tax registration according to law, and made a decision on punishment according to relevant facts and regulations.
(iii) defrauding simple cancellation after falsely issuing invoices, and the procuratorial organ proposes to cancel the registration across provinces.
Wang and his clothing company were put on file for investigation on suspicion of falsely issuing special VAT invoices. In order to avoid fines and other responsibilities, Wang defrauded the company of simple cancellation of registration with false materials during the bail pending trial. The procuratorial organ went to the market supervision department of other provinces to suggest canceling its simple cancellation registration and restoring the company's qualification as a business entity. After prosecution by the procuratorate, the court sentenced the defendant Wang to three years' imprisonment, suspended for four years and fined 100,000 yuan for falsely issuing special invoices for value-added tax.
II. tax clearance is the premise of cancellation, non-transaction transfer and other special circumstances need to pay attention to tax obligations.
Under normal circumstances, an enterprise's termination of operation and withdrawal from the market must go through three main processes: resolution dissolution, liquidation distribution and cancellation of registration. In liquidation, for example, Article 16 of the Detailed Rules for the Implementation of the Law on Tax Collection and Management stipulates that "taxpayers should settle the tax payable, late fees and fines, and hand in the invoices, tax registration certificates and other tax certificates to the tax authorities before going through the cancellation of tax registration", and the enterprises to be cancelled need to pay the taxes owed, late fees and other tax certificates generated in the liquidation process.
If the enterprise has not incurred or paid off the creditor's rights and debts, employees' wages, social security fees, taxes payable, etc., and has made a written commitment (that is, submitted the Letter of Commitment for All Investors) to bear the relevant legal responsibilities and publicized it according to the regulations, it can be cancelled according to the summary procedure and exempted from handling the tax clearance certificate. After the tax department obtains the information pushed by the market supervision department to apply for simple cancellation of registration through information sharing, the tax department does not raise any objection to the taxpayers who are shown by the inquiry system as follows: first, taxpayers who have not handled tax-related matters; second, taxpayers who have handled tax-related matters but have not received invoices (including invoicing on behalf of them), owed taxes and have no other unfinished matters; and third, taxpayers who have completed tax clearance procedures such as paying off invoices and settling tax payable at the time of inquiry.
It is not difficult to see that fulfilling tax obligations and paying taxes and fees on liquidation income are necessary procedures for the cancellation of enterprises. In practice, except for the "escape" malicious cancellation of unpaid taxes to avoid tax obligations, the tax obligations in the liquidation process are often easily ignored. According to the provisions of Article 55 of the Enterprise Income Tax Law, an enterprise shall declare and pay income tax to the tax authorities in accordance with the law on the liquidation income before going through the cancellation of registration. At the partnership level, Article 16 of the Provisions on Individual Income Tax Collection for Investors in Sole proprietorship Enterprises and Partnership Enterprises (Caishui [2000] No.91) stipulates that when a partnership enterprise is liquidated, investors shall settle tax-related matters with the competent tax authorities before canceling registration, and the liquidation income of the partnership enterprise shall be regarded as the annual production and operation income. In the demolition of shareholding structure, it is very common that the company loses its legal person qualification and the shares are restored to investors through non-transaction transfer. According to the regulations, the above transactions belong to the change of stock ownership between different entities and are regarded as sales in tax law. Limited liability companies should be liquidated before cancellation. In practice, there have also been many cases in which the cancelled enterprises have been restored to tax registration to recover taxes or recovered from shareholders without reporting taxes.
III. to recover the tax arrears from the cancelled enterprises or shareholders should be in accordance with the law.
In recent years, the relevant laws and regulations have improved and clarified the legal liability for false promises and evasion of debts or penalties through cancellation. For example, Article 240th of the Company Law revised in 2023 added a simple cancellation system and clarified the legal liability of shareholders for false promises in the third paragraph. "If a company cancels its registration through summary procedures and shareholders make false promises to the contents specified in the first paragraph of this article, they shall be jointly and severally liable for the debts before cancellation of registration." Article 20 of the Implementation Measures for the Administration of Company Registration, which was implemented in February this year, clarified the situation of cancellation of registration by the registration authority. "If there is evidence that the applicant obviously abused the independent status of the company as a legal person and the limited liability of shareholders, maliciously transferred property, evaded debts or evaded administrative punishment by changing the legal representative, shareholders, registered capital or canceling the company, which may endanger the public interests, the company registration authority shall not handle the relevant registration or filing according to law, and the one that has already been handled shall be revoked."
In practice, with the promotion of multi-department information linkage and collaborative tax administration, the tax cancellation pre-inspection service is embedded in the enterprise cancellation process; For the problem of tax arrears of cancelled enterprises, some local tax authorities require shareholders to bear corporate debts in proportion to their capital contribution based on false promises when shareholders cancel; Some tax authorities signed a memorandum of cooperation with the municipal supervision department, which clarified the path of tax arrears recovery, that is, for the tax-related illegal enterprises that have been cancelled, the tax authorities initiated and informed the market supervision department of the relevant investigation, and the market supervision department cancelled the registration of the enterprises involved in the case according to law, restored their qualifications as commercial subjects, and then the tax authorities recovered the taxes.
There are many disputes in practice about whether the tax authorities can recover taxes from the shareholders of cancelled enterprises. Article 56 of the Law on Tax Collection and Management (Revised Draft for Comment) issued this year adds the applicable path of denying corporate personality in the tax field, that is, the tax authorities can directly recover taxes and tax late fees from shareholders who abuse the independent status of legal persons and the limited liability of shareholders and evade taxes by withdrawing funds or canceling. We believe that if the shareholders abuse the independent status of legal person and cancel in bad faith, and the tax authorities intend to "pierce the corporate veil" to recover taxes from the shareholders, they should still take the judicial review mechanism of the people's court established by the Company Law as the precondition—that is, if the tax authorities claim that the investors have abused their rights, they should file a lawsuit to the court to deny the legal person personality according to law. According to the facts and evidence, the judicial organ will make a substantive review and judgment on whether the investor abuses the independent status of the legal person and the limited liability of the investor, instead of directly denying the personality of the legal person through administrative procedures, so as to prevent the executive power from making a final judgment on civil legal relations beyond the judicial power.
As for the cancellation of registration by the municipal supervision department first, it is necessary to have relevant evidence to prove that the enterprise abuses the independent status of the company as a legal person and the shareholders have limited liability to evade debts and avoid administrative punishment by canceling the company, submit false materials or take other fraudulent means to conceal important facts to defraud the cancellation of registration. If the cancelled enterprise does not exist in the above circumstances, the municipal supervision department may not be able to cancel the registration of the enterprise only by the letter from the tax authorities.
IV. Summary
When an enterprise intends to withdraw from the market and cancel the registration, it is necessary to comprehensively sort out whether there is historical tax arrears, and pay attention to the tax liability of liquidation income, especially for special circumstances such as non-transaction transfer, and the nature of tax law should be clarified to avoid the unpaid tax affecting the cancellation procedure, resulting in late fees and even joint liability of shareholders.

Editor's Note: In practice, to collect taxes and fees related to real estate auctions in the civil enforcement procedure, some local tax authorities and people's courts have jointly issued normative documents, attempting to establish an operational pathway for assisting in deducting and transferring such taxes and fees. However, such documents not only lack a clear higher-level legal basis but also essentially exceed the boundaries of authority of normative documents, and thus urgently need to be sorted out. Taking a demonstrative enforcement ruling of the Beijing Higher People's Court as an example, this article analyzes why people's courts should not support tax authorities' deduction and transfer of transaction-related taxes and fees from auction proceeds, and further sorts out the legal remedies for creditors whose rights and interests are damaged during the civil enforcement process.

Editor's note: Most of the tax violations in the financial industry are manifested in two types: false invoicing and tax evasion. Through observing these cases, it was found that financial enterprises involved large amounts of false invoicing or tax evasion, involving various financial sub-industries such as trusts, funds, and financing leasing. Based on this, this paper intends to analyze the causes of tax violations in financial enterprises, and propose corresponding strategies for resolving tax administrative and criminal responsibilities.

Editor's Note: A Non-Vessel Operating Common Carrier (NVOCC) is a carrier that, without owning its own transport vessels, accepts cargo from shippers, signs contracts of carriage with shipping companies in its own name, and then issues bills of lading or other transport documents to the shippers. NVOCCs originated in international shipping and later expanded to domestic water transport. After February 27, 2019, the administrative approval for NVOCC business was replaced with a filing system, further enhancing market competitiveness. However, compared to the development of digital freight platforms, NVOCC progress has been relatively slow, with an incomplete regulatory system. Particularly, the lack of clear guidance at the tax level has led to questions about some NVOCC practices and repeated involvement in risks related to falsely issued invoices. This article provides a brief analysis.

Editor's Note: Value-added tax is based on the added value of each link in commodity production and circulation, and the buyer obtains the deduction rights based on the purchase price including tax and deducts the tax amount indicated on the invoice according to law. This taxation mechanism not only realizes the tax collection of each link, but also avoids repeated taxation. In the current practice of tax collection and management, "deduction by ticket" is the core to realize VAT collection. In order to crack down on the behaviors of "fake enterprises" that defraud special VAT invoices and run away quickly after committing illegal and false acts, the Announcement on the Management of Abnormal VAT Tax Deduction Certificates (State Taxation Administration of The People's Republic of China Announcement No.38, 2019) and other policies stipulate a variety of abnormal VAT tax deduction certificates (hereinafter referred to as abnormal tax deduction certificates) and clarify the recipients. The abnormal tax deduction voucher system avoids the risk of further expansion of national tax losses caused by abnormal upstream enterprises by supervising the invoice deduction of the drawee enterprises. In the process of implementing the abnormal tax deduction voucher system, there are many disputes about the identification situation and consequences in practice. This paper analyzes the common problems for readers' reference.
I. Scope: Under what circumstances will the invoice obtained by the drawee enterprise be recognized as an abnormal tax deduction certificate?
According to Announcement on Issues Concerning the Recognition and Handling of Special VAT Invoices Issued by Escaped (Lost) Enterprises (State Taxation Administration of The People's Republic of China Announcement No.76 (2016)) and Announcement No.38, abnormal tax deduction vouchers include the following six situations.
For "obtaining special VAT invoices issued by abnormal households", it is necessary to grasp whether the relevant invoices constitute abnormal tax deduction certificates from the following two aspects: on the one hand, it is necessary to judge whether there are abnormal households in the upstream, and the Announcement of State Taxation Administration of The People's Republic of China on Several Matters of Tax Collection and Management (State Taxation Administration of The People's Republic of China Announcement No.48, 2019) stipulates that "taxpayers have the obligation to declare taxes, but all taxes have not been declared for three consecutive months. The tax collection and management system automatically identifies it as an abnormal household ".According to the Announcement of State Taxation Administration of The People's Republic of China on Further Improving Tax Registration Management (State Taxation Administration of The People's Republic of China Announcement No.21, 2011), the tax authorities should announce the taxpayer identification number, enterprise name and business address of the abnormal household in the month following the identification of the abnormal household, so that the enterprise can judge whether the upstream is an abnormal household by searching the announcement when receiving the notice of the abnormal tax deduction certificate. On the other hand, as for how to divide the abnormal range of invoices obtained from abnormal households, Announcement No.38 clearly states that the abnormal range is limited to the special VAT invoices of upstream enterprises that "have not reported to the tax authorities or paid taxes according to regulations". In practice, some tax authorities uniformly identify all invoices obtained from abnormal households by downstream drawee enterprises as abnormal vouchers, requiring downstream enterprises to make input transfer, which actually expands the provisions on the scope of abnormal vouchers in this situation and harms the legitimate rights and interests of downstream drawee enterprises.
It is controversial whether "the special VAT invoice issued by the taxpayer is suspected of being falsely issued and the consumption tax is not paid as required". At present, in practice, the upstream enterprises fail to pay the enterprise income tax in full, and the tax authorities treat the invoices issued by the upstream enterprises as abnormal tax deduction certificates according to the provisions of this situation, which leads to the risk of the invoices obtained by the downstream enterprises being transferred out of the input. We believe that the unpaid enterprise income tax does not belong to the case of being listed as an abnormal voucher as stipulated in Announcement No.38, and the invoices issued to downstream enterprises should not be regarded as abnormal tax deduction vouchers. In the interpretation of Announcement No.38, the State Administration of Taxation pointed out that the background of the announcement was to crack down on the behavior of "registering a' fake enterprise' that has no actual business and only falsely invoicing, and quickly escaping (losing contact) and maliciously evading tax supervision after implementing illegal and false invoicing", that is, to realize the tax collection and management of value-added tax (and consumption tax in some cases) through invoices, and to prevent "fake enterprises" from falsely invoicing. Therefore, in the case of real transactions, if the upstream enterprise issues invoices to the downstream enterprises and has truthfully declared and paid the value-added tax, the downstream enterprises will deduct the value-added tax input according to the obtained invoices, which will not cause tax losses. The problems of non-payment or underpayment of income tax caused by the upstream enterprises due to their own problems should be collected and managed in accordance with the provisions of the tax law, and should not be used to identify abnormal tax deduction vouchers and implicate the legitimate rights and interests of the downstream enterprises.
II. Clear procedures: how to verify the abnormal tax deduction certificate and strive for normal deduction?
As mentioned earlier, taxpayers who have obtained abnormal vouchers cannot deduct the input tax for the time being. Announcement No.38 and the Operating Rules for Handling Abnormal VAT Deduction Vouchers (No.46 [2017] of the Ministry of Taxation) further stipulate the relief channels for verifying the application. If taxpayers have objections to the abnormal vouchers identified by the tax authorities, they should pay attention to the following two verification points:
On the one hand, we should pay attention to the deadline requirements for verifying applications. The drawee enterprise shall submit an application for verification to the competent tax authorities within 20 working days from the date of receiving the Notice of Tax Matters that identifies the abnormal tax deduction certificate; For the drawee with a tax credit rating of A, after receiving the notice of abnormal vouchers, the drawee can temporarily not handle the input transfer-out, and can apply for verification of abnormal vouchers within 10 days.
On the other hand, it is necessary to submit information to confirm the authenticity of the business. Announcement No.46 stipulates that after receiving the taxpayer's application for verification of abnormal vouchers, the tax authorities mainly carry out the review work from four aspects: first, whether the tax declaration is consistent with the deduction, and second, whether the contract, transportation and warehousing, funds and invoices are consistent; The third is to verify the authenticity of the transaction through upstream and downstream off-site investigation; The fourth is to go to the taxpayer's production and business premises to conduct on-the-spot investigations on its operating conditions and production capacity. Judging from the above provisions, the contents verified by the tax authorities mainly focus on the key issue of business authenticity, and take the consistency of the four streams as the benchmark for judgment. Therefore, the drawee enterprise shall submit business contracts, bank vouchers, transportation and storage certificates and other relevant materials to prove the authenticity of the business around the above-mentioned review points.
III. Know the result: Will the bill be suspended if the abnormal tax deduction certificate is obtained? Can the related costs be deducted before tax?
As mentioned above, the tax authorities should complete the verification work within 90 days after receiving the verification application. If no abnormal situation is found after verification, and the relevant provisions of the current VAT input deduction are met, the drawee enterprise should be allowed to declare the deduction normally. If it does not meet the relevant provisions, the VAT deduction is still not allowed. However, in practice, for those who have obtained abnormal tax deduction certificates, some local tax authorities not only do not allow the invoice-receiving enterprises to deduct the value-added tax input on the corresponding invoices, but also take measures such as stopping invoicing and not allowing pre-tax deduction of enterprise income tax. In our opinion, there are legal circumstances in both the suspension of tickets and the pre-tax deduction of corporate income tax, and the above results are not necessarily caused by obtaining abnormal tax deduction certificates, as follows:
With regard to the problem of being stopped from issuing invoices when obtaining abnormal tax deduction certificates, according to the provisions of Article 72 of the Law on the Administration of Tax Collection, there are legal circumstances to stop issuing invoices. "If a taxpayer or withholding agent engaged in production or business operations commits tax violations as stipulated in this Law and refuses to accept the tax authorities' handling, the tax authorities may collect their invoices or stop selling invoices to them." Among them, the illegal acts include "failing to apply for tax registration, change or cancellation of registration within the prescribed time limit", "failing to set up and keep account books or keep accounting vouchers and related materials in accordance with regulations", tax evasion, fabricating false tax basis, failing to file tax returns, evading the recovery of tax arrears and so on. Moreover, the Notice of State Taxation Administration of The People's Republic of China on Further Improving the Work of Taxpayer's VAT Invoice Collection (No.64 [2019] of the General Administration of Taxation) also clarifies that "the taxpayer's abnormal VAT deduction certificate should be identified and handled according to the law, and taxpayers should not be restricted from issuing invoices except for serious deviation in purchase and sale, false tax declaration, and two unreasonable tax interviews." Therefore, it is necessary to have a legal basis and circumstances for taxpayers to stop issuing invoices. If there are no such problems as serious deviation of purchase and sale and false tax declaration, they should not stop issuing invoices just because of abnormal invoices.
Regarding whether the abnormal tax deduction certificate can be deducted before enterprise income tax, in practice, some local tax authorities think that the abnormal tax deduction certificate should not be used as the pre-tax deduction certificate of enterprise income tax. We believe that obtaining abnormal tax deduction depends on whether pre-tax deduction of enterprise income tax can be made in combination with the Enterprise Income Tax Law and its implementing regulations. If the invoice obtained by an enterprise is recognized as an abnormal tax deduction certificate, but the expenses incurred meet the provisions of the Enterprise Income Tax Law on the authenticity, rationality and relevance of cost deduction, it should be allowed to be deducted before income tax. In addition, according to Article 14 of the Measures for the Administration of Pre-tax Deduction Vouchers for Enterprise Income Tax (State Taxation Administration of The People's Republic of China Announcement No.28, 2018), if an invoice issued by an abnormal household is obtained, the receiving enterprise can provide necessary information such as certification materials for inclusion in the abnormal household, relevant business contracts or agreements, payment vouchers paid in a non-cash way and so on to confirm the authenticity of the expenditure, and strive to allocate relevant costs before enterprise income tax.
IV. Summary
If the invoices obtained by downstream drawee enterprises are identified as abnormal tax deduction vouchers, they should pay attention to whether they conform to the scope of abnormal tax deduction vouchers, and apply for verification in time to provide relevant data support for business authenticity and transaction rationality. For disputes such as stopping invoicing and not allowing pre-tax payment of enterprise income tax, statements and defenses can be made around the circumstances stipulated by laws and regulations to safeguard their legitimate rights and interests and reduce economic losses.

In civil enforcement cases, tax authorities often issue letters to enforcement courts requesting assistance in withholding taxes for the transfer registration of auctioned real estate. Once the enforcement court approves the tax authority's request, using the auction proceeds to pay the tax authority will directly affect the creditor's interest in obtaining repayment. This phenomenon also widely exists in enforcement cases where the creditor is a mortgagee. Many mortgagees are deeply confused by the huge discrepancy between the priority of mortgage rights recognized by the Tax Collection and Administration Law and the actual situation, and they often have no way to seek redress or obtain relief. Taking a case as the starting point, this article focuses on analyzing that the tax authority's act of sending a letter requesting assistance in withholding taxes and the court's act of cooperating in withholding taxes lack legal basis, and sorts out and analyzes different legal remedies for creditors, aiming to provide practical references for resolving such disputes and safeguarding creditors' rights and interests.

In August 2025, the Fushun Intermediate People's Court made a judgment on whether the container bag factory constituted a case of obtaining false VAT special invoices in good faith. This judgment has prompted many tax professionals to think about obtaining false VAT special invoices in good faith. This article intends to explore the historical origin of the false VAT special invoice obtained in good faith, and believes that under the current era background, the constituent elements of the false VAT special invoice obtained in good faith should be revised for readers' reference.

On June 20th, the "Regulations on the Reporting of Tax-Related Information by Internet Platform Enterprises" (State Decree No. 810) was officially released. [It stipulates the first centralized reporting of identity and income information of operators and practitioners within platforms from October 1st to 31st.]{.mark} This regulation will have profound impacts on internet platforms, their operators, and practitioners. Subsequently, on June 26th, the State Taxation Administration (STA) successively issued the "Announcement on Matters Concerning the Reporting of Tax-Related Information by Internet Platform Enterprises" (STA Announcement [2025] No. 15, hereinafter referred to as "Announcement 15") and the "Announcement on Various Matters Concerning Withholding Reporting and Agency Reporting for Practitioners within Platforms by Internet Platform Enterprises" (STA Announcement [2025] No. 16, hereinafter referred to as "Announcement 16"). This article will systematically analyze the impacts on platform enterprises and related practitioners based on the specific content of the aforementioned new regulations.