Tax Administrative Penalty Hearing
Tax Administrative Review
Tax Administrative Litigation
Tax Criminal Cases
Prevention of tax related criminal risks of entrepreneurs
Tax inspection is an important means for the tax authorities to investigate and deal with tax violations and protect tax revenue. It is also the forefront of tax related risks faced by enterprises and other taxpayers and the outbreak of tax disputes between taxpayers and tax authorities. With the current domestic economic growth slowing down and tax collection pressure rising up, the tax authorities in the New Normal are constantly strengthening the tax inspection, innovating the tax inspection means, and highlighting the importance of tax inspection in the organization of taxation. To a certain extent, it leads to more tax disputes and tax related risks of taxpayers. Tax inspection induces all kinds of tax related legal liability, including not only property loss, reputation damage, various restrictions on business activities, but also serious criminal liability. Tax inspection response is one of the most competitive practice areas of Hwuason Law Firm. With knowledge of tax and law, Hwuason’s lawyers have a deeper understanding of the procedures of tax inspection. Hwuason’s lawyers are familiar with the practical scale of the four steps of tax inspection, which are case selection, inspection, trial and implementation. Our tax inspection response service is based on the prevention of criminal risks and guided by the maximization of taxpayer’s legitimate interests.
If the tax authorities impose any tax administrative penalties on taxpayers in accordance with tax laws or regulations, the tax authorities shall make a notification of the punishments to the taxpayers in accordance with the Law of PRC on Administrative Penalty. In accordance with the legal circumstances, the taxpayer shall have the right to apply for holding a hearing and express defense opinions. Tax administrative penalty hearing is an important procedure for taxpayers to fully express their opinions and safeguard their legitimate rights and interests before the tax authorities make a decision on penalty. During the hearing, the tax authorities shall perform the duty of disclosing the evidence and other materials, listening to and replying to the taxpayer's statements or defense opinions. Due to the limited time of applying for hearing and the tax authorities’ negative attitude towards organizing the hearing, taxpayers may easily ignore and miss this legal remedy. In addition, the procedure of a hearing is similar to a trial, taxpayers who participate in the hearing independently often fail to play a good role due to lack of understanding of the hearing procedure. Under the guidance and assistance of professional tax lawyers, taxpayers may make full and effective use of hearing procedures to exercise the rights of cross-examination with respect to the facts and evidence, submit evidence, issue cross-examination opinions, make statements and debate opinions, so as to safeguard their legitimate rights and interests to the greatest extent. Hwuason’s lawyers provide high-quality tax administrative penalty hearing agency services for taxpayers. On the basis of tax investigation, we in-depth analyze the facts, grounds, and the basis of the decision of tax administrative penalty, assess the risk of administrative penalty and potential criminal liability. We defend taxpayers’ rights from many aspects such as the law enforcement procedure, fact finding, application of tax law, limitation of penalty, reasons for reduction or exemption of penalty, etc. We stick to the service goal of preventing taxpayers' business been considered illegal and reducing taxpayers' property losses.
Tax administrative review is one of the important legal remedies for taxpayers to safeguard their own legitimate rights and interests and to solve the specific tax disputes between taxpayers and the tax authority. It is also a necessary legal procedure to solve specific tax disputes. Tax administrative review is essentially an internal error correction mechanism of the tax administration system and will not be operated in public, so the contradiction of tax disputes will not be externalized. Tax administrative review will not excessively intensify the tension between taxpayers and the tax authority. And tax administrative review is flexible. The effect of dispute settlement is relatively ideal. According to a yearly nationwide incomplete statistic, the proportion of tax administrative review cases in which tax authorities revoke the original act is about 20%, and the proportion of cases settled through reconciliation or mediation is even higher than 30%. Tax administrative review is one of Hwuason’s core practice area. The settlement rate and revocation rate of tax administrative review cases we represent have maintained at a high level. A professional and efficient team and intensive cultivation of the tax laws and regulations are important factors for Hwuason to help taxpayers win the review case. Most of Hwuason’s lawyers possess the knowledge of tax, law and finance, and are also qualified as tax agents and certified public accountants. Relying on our knowledge and practical experience, Hwuason’s lawyers will analyze the focus of tax disputes, assess the tax risks and potential criminal liability risks, and formulate review objectives, effective reconsideration strategy and thorough reconsideration plan on the basis of in-depth investigation of the business involved. We effectively protect the legitimate rights and interests of taxpayers by the means of perspective examination of evidence, fact finding, application of tax law and enforcement procedure.
Tax administrative litigation is a legal relief procedure for taxpayers to resort to judicial review of tax disputes. Together with tax penalty hearing and tax administrative review, it constructs a collection of legal relief rights for both sides to solve tax disputes and for taxpayers to safeguard their legitimate rights and interests. Tax penalty hearing and tax administrative review are the internal review procedures of tax administrative system, but tax administrative litigation is an external judicial review procedure. The latter is quite different from the former two in terms of legal rigidity, flexibility, independence and openness, which makes its mechanism of solving tax disputes unique. Tax penalty hearing and tax administrative review are the internal review procedures of tax administrative system, and tax administrative litigation is a judicial review procedure. The latter is quite different from the former two in terms of legal rigidity, flexibility, independence and openness, which makes its mechanism of solving tax disputes unique. Once the tax disputes and contradictions between the two sides cannot be properly solved through the internal mechanism of the administrative system, administrative litigation will become the ultimate path for taxpayers to resort to justice to safeguard their legitimate rights and interests. Tax administrative litigation has obvious legal rigidity, judicature, independence and openness. The people's court, which is independent of the administrative organ, conducts a comprehensive judicial review on the legality and rationality of the specific administrative acts of the tax authorities, and the tax normative documents on which the tax authorities make specific administrative acts can also be included in the scope of judicial review. Recently, the number of tax administrative litigation cases in China has gradually increased, and the winning rate of taxpayers has increased. Tax administrative litigation plays a positive role in solving tax disputes and safeguarding the legitimate rights and interests of taxpayers. With the advantages of tax and law, Hwuason can satisfy the needs of tax administrative litigations from the aspect of law and tax. The intensive cultivation of tax law and the relative experiences are the important factors to help taxpayers win the trust and attention of judges and obtain the ideal results of cases. As tax law experts, we can complete the investigation and retrieval of related economic business, dispute focus and tax law provisions of complicated tax cases in a short period of time. Then, we form a comprehensive litigation plan based on professional analysis and demonstration, and construct a multi-angle and multi-faceted defense framework. After that, we effectively communicate with judges about lawyer’s opinions, help taxpayers to effectively exercise their litigation rights and strive for the legitimate rights and interests of taxpayers to the greatest extent. Most of the tax administrative litigation cases represented by Hwuason’s lawyers have achieved satisfactory results.
Criminal cases involving tax of private enterprises have been increasing recently. The criminal liability of those enterprises and their managers presented four distinguishing features: categorization, differentiation in business, explosiveness and harsh punishment. According to the?information published by the Ministry of Public Security, over 22800 criminal cases involving tax were established by nationwide public security organs from August 2018 to August 2019 which involving 561.98 billion yuan. According to China judgements online, criminal cases involving tax are mainly refer to falsely issuing special VAT invoices cases, tax evasion cases and defrauding export tax rebate cases. Those cases took over 90% of the whole criminal cases which endanger the regulation of tax collection and management. Falsely issuing special VAT invoices cases were even up to 60%. Falsely issuing special VAT invoices cases, tax evasion cases and defrauding export tax rebate cases were still frequently occurred. Except for tax evasion cases, falsely issuing special VAT invoices cases and defrauding export tax rebate cases were easily convicted with severe punishment due to the overly-simplified count and the lack of professionalization. With the help of the special action of fighting fraud for two years and hundred-cities war against crime by the Ministry of Public Security, the cooperation mechanism of case jointly handled by tax authorities and police was improved and promoted recently, our government achieved great success in fighting crimes involving tax, and the cases that transferred from tax administrative cases to criminal cases increased substantially. In addition, the extended custody and seizure of property not involved in the case wreaked havoc for the private enterprises and their managers. The features of criminal cases involving tax and the present situation of national tax collection and administration call for professional support from tax lawyers who are talented with tax law and criminal law in the defend. As the core business of Hwuason, the criminal cases involving tax we agent achieved favorable results in the majority situation, especially in some certain criminal cases involving tax.
During the 40 years of reform and opening up, China's Tax Legalization has experienced development from scratch, and gradually deepened and promoted. However, the establishment and improvement of the rule of law in taxation needs to be pushed forward with the development of market economy and the continuous improvement of the rule of law. So, it is lagging and will be in an immature and unstable state for a long time in the future. In the difficult process of Tax Legalization, it is difficult to get comprehensive and effective humanistic attention and institutional care for the protection of private enterprises and entrepreneurs, which leads to the widespread tax related criminal risks of entrepreneurs. In recent years, the criminal liability risks of private enterprises and their managers became more severe, criminal cases involving tax of private enterprises have been increasing. According to the information published by the Ministry of Public Security, over 22800 criminal cases involving tax were established by nationwide public security organs from August 2018 to August 2019 which involving 561.98 billion yuan. According to our practical experiences, the criminal liability risks of those enterprises and their managers presented four distinguishing features: categorization, differentiation in business, harsh punishment and explosiveness. 1、Categorization. According to China judgements online, criminal cases involving tax are mainly refer to falsely issuing special VAT invoices cases, tax evasion cases and defrauding export tax rebate cases. Those cases took over 90% of the whole criminal cases which endanger the regulation of tax collection and management. Falsely issuing special VAT invoices cases were even up to 60%. Tax risks involving VAT invoices became the most serious problem of private enterprises’ criminal liability. This kind of tax risk which may transfer to the upstream and downstream enterprises, was always lurking below the daily business, and may break out due to the enterprises’ internal factors or uncontrolled external factors. The familiar business models or transactions include the allocation of VAT invoices, change of VAT invoices’ contents, affiliation, commissioned processing, red offset, bill passing, issuing VAT invoices in circular, financing trade, false increasing of performance, separation of invoices and goods, and obtaining financial return rewards. 2、Differentiation in Business. Some certain businesses are subject to China’s current tax system and faced with the problem of the lack of input tax and unavailable of tax deduction certificate. Issuing special VAT invoices falsely, tax evasion and export tax rebate defraudation are common illegal acts by those businesses. Especially some certain tax risks came in concentrated bursts in a short period in the industry of renewable resources, agriculture, precious metals, coal and other bulk trade, logistics industry, petrochemical industry, foreign trade, pharmaceutical industry and real estate industry. 3、Harsh Punishment. Falsely issuing special VAT invoices cases not only took the highest proportion in criminal cases involving tax but also became the second crime threaten private entrepreneurs. The crime of falsely issuing special VAT invoices is faced with low standards of being guilty and harsh punishment. If an enterprise falsely issued special VAT invoices which involving tax over 2.5 million yuan, the enterprise and its managers shall be sentenced to fixed-term imprisonment of not less than ten years or life imprisonment. In addition, the criminal law did not give reduced or lighter punishment to this crime which means the enterprise and its managers cannot achieve reduced or lighter punishment even they pay the overdue tax voluntarily. 4、Explosiveness. The integration of national and local taxation bureaus strengthened the integration of tax inspection. Golden Tax-III project improved the tax authorities' ability of tax information collection and analysis. The cooperation mechanism of case jointly handled by tax authorities and police has been gradually improved national wide. With the help of the special action of fighting fraud for two years and hundred-cities war against crime by the Ministry of Public Security, the cooperation mechanism of case jointly handled by tax authorities and police became normalization and campaign-style. The cases that transferred from tax administrative cases to criminal cases increased substantially which lead to the outbreak of criminal liability risks of private enterprises and entrepreneurs. Precaution of criminal liability risks involving tax is one required course for China entrepreneurs. Hwuason adheres to the practice concept of safeguarding the legitimate rights and interests of taxpayers and promoting the fairness and justice of tax law, and always takes the prevention and control of entrepreneurs' tax-related criminal risks as the core consideration of our various tax law services. Hwuason’s lawyer teams have participated in thousands of tax dispute resolution services and acted as agents in thousands of tax administrative cases and criminal cases. With rich practical experience, we have a deep understanding of how entrepreneurs' tax-related criminal risks are buried, latent, evolved and erupted. As the core business with the most professional advantages and service value, we can provide systematic services for entrepreneurs to prevent and control tax-related criminal risks: ——Keep away from risks: thoroughly strip off illegal business, obtain legitimate tax benefits through legal tax saving, guide enterprises to operate tax compliance, solve tax system blockage and ease tax burden pain points. ——Risk identification: carry out tax risks investigation, investigate internal and external tax risks, check the causes of risks, analyze and deduce potential criminal liabilities and illegal costs. ——Risk prevention: provide risk prevention and resolution measures, carry out tax self-inspection, tax authorities and enterprises coordination, expert consultation and demonstration. ——Handling risks: dealing with tax inspection, acting as agents in tax penalty hearing, tax administrative review, administrative litigation, deploying lawyer defense team in advance, criminal consultation and consultant.
Tax planning is one of Hwuason’s core practice area. Hwuason has leading tax planning experts. With the knowledge of tax and law, we can provide customers with the most operational tax planning scheme and comprehensively assist them to implement the plan. According to our experience, tax planning should be legal. Only when the tax planning is legal, taxpayers can reach the goal of maximizing wealth value. Tax planning should be based on the effective tax laws and regulations. In the meantime, we also take the imperfection of domestic tax law and the excessive discretion of tax authorities into consideration. We hold to the legal "bottom line" of tax planning and control the risks. Our customers are well-known enterprises of high-tech, financial investment, real estate, human resources, petrochemical and other fields. Hwuason wins customers’ recognition. With professional quality and ability, Hwason has been praised by peers. The tax planning services include: 1、Tax planning of tax preferential policy. Hwuason provides tax preferential policy consultation for enterprises and other taxpayers. Hwuason provides the scheme for obtaining regional tax preference, industrial tax preference and local tax preference according to the actual situation, industry and relevant qualifications of the enterprise. In the meantime, Hwuason offers services of preferential qualification maintenance, tax risk control and management. We pay special attention to following the principle of legality and efficiency, so as to ensure that taxpayers can enjoy the tax preference in time, and avoid illegal risks. 2、Merger and acquisition and tax saving planning of investment and financing. Hwuason deeply participate in customer's M & A, investment and financing decisions. Hwuason conducts tax investigation, formulates tax saving plan based on business purpose, designs transaction process and structure according to pre -, in-process and post event three trading process, assists in the implementation of tax saving scheme, and help enterprises realize the effect of deferred tax payment and tax saving. 3、Tax planning for the listing of enterprises. Hwuason carries out the tax due diligence of the enterprises to be listed, assists the enterprises to realize the tax standardization guidance, formulates the reasonable equity structure, ensures the optimal comprehensive tax burden of long-term operation, and resolves the potential tax risks. 4、International tax planning. Hwuason provides services such as tax due diligence, tax framework building, tax treaty preferential application, operation tax saving optimization, investment exit tax saving planning, transfer pricing, anti-tax-avoidance investigation response services, and CRS response service for dual tax residents.
Company Law is one of the legal service areas in which Hwuason has paid continues attention. We focused on a full range of service in the area of Company Mergers & Acquisitions, IPO, etc. We are especially skilled at reasonable tax planning in the basis of providing the client with sound legal advice. Hwuason has participated in the substantial transactions which changed China and even the world’s commerce and got rewards and recognition from the association and clients. We are able to provide clients with professional services below: 1、M&A: conduct due diligence, provide consultations on industrial access policies and administrative approval matters, design the transaction structure and tax saving plan, draft contracts and negotiate, provide legal advice in the investment decision-making period, transitional period and delivery period. 2、capital market: provide the entire counseling for enterprise restructuring and IPO, private placement tax planning, design of management structure of listed company and tax risks controlling, provide consultations on M&A, division and major assets restructuring of listed company. 3、anti-monopoly and competition compliance: provide anti-monopoly declaration, centralized declaration of business operators, M&A compliance suggestion, deal with the anti-monopoly investigation, act as an agent in antitrust litigation and review. 4、bankruptcy reorganization: file for bankruptcy on behalf of the debtor, apply for compulsory liquidation, participate in bankruptcy proceedings, act as an agent in litigation and arbitration related to dissolution and bankruptcy, provide tax consultations on dissolution and bankruptcy. 5、IP: design the transaction structure and tax saving plan, including royalties tax saving plan, confirm and protect trademarks, provide consultations on trademarks and enterprise IP strategies. 6、labor: provide consultations on the individual tax of employees, design the payment structure and tax saving plan of staffs of executive group, help the transfer and resettlement of employees during the enterprise restructuring and reorganization, deal with crimes involving tax and corruption of employees, design Employee Stock Ownership Plan, improve compliance of social insurance.