On the evening of March 25, the five major departments of the State Administration of Taxation, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs and the State Administration for Market Regulation jointly issued the "Announcement on Matters Concerning Optimizing Services and Standardizing Management of Exports of Goods Subject to Domestic Linked Taxes."
Fundamentally curb
Export of taxable goodsTaxpayers, customs declaration companies, customs declaration personnel and other entities and related personnelIt is not allowed to forge, alter, buy or sell customs declarations, fabricate export business, falsely report the value of goods, or underreport the value of goods.
This move indicates that the country's crackdown on export tax evasion has risen from sporadic actions in the past to the level of laws and regulations, which indicates thatBuy export behaviorwill be fundamentally curbed.
Should"announcement"In essence, it is a comprehensive review and supplementation of the previous problem of exporting at low prices and evading taxes.
According to the interpretation, one of the core purposes of the five national departments jointly issuing this "Announcement" is toTargeting low-price tax evasion exports(especially steel), which is commonly known in the industry as "buy-to-export".
Since the export of steel involves huge export volume and high tax amount, it becomes the key target of this announcement.
The profit mechanism of low-price tax evasion
Since 2021, the country has completely abolished the export tax rebate policy for all types of steel. This change means that exporters no longer need to rely on invoices and export documents issued by upstream companies to go to the tax department to apply for tax rebates.
At the same time, foreign consignees have never asked domestic exporters to provide invoices, so domestic exporters have accumulated a large amount of goods that "do not require invoices".
These "no invoice required" goods provide exporters with a new profit channel: they can be resold to downstream users who "only need input invoices but not the actual goods".
Downstream users purchase these VAT invoices at low prices and deduct them as input tax, thereby obtaining tax exemptions without actually purchasing steel.
The harm of exporting by paying bills is far-reaching
In this industry chain, exporters make a certain profit by selling tax invoices; downstream users increase input tax deductions and reduce tax burdens by purchasing tax invoices; and foreign consignees purchase the required goods at a lower price. However, the only thing that suffers is the country's tax revenue.
In order to avoid possible subsequent review and accountability, many companies that use low-price tax evasion to pay for exports have adopted the strategy of quickly registering foreign trade companies and canceling their registrations immediately after completing the transaction.
Since these companies do not need to provide tax receipts when they are deregistered, they are often able to evade investigation by the tax authorities, making this type of tax evasion more covert and difficult to combat.
The harm of paying for exports is far-reaching. The core of it is that low-price exporters and foreign customers profit from it, while national tax revenue suffers losses.
This behavior has also seriously damaged the image of China's steel exports and provided a "handle" for foreign countries to launch anti-dumping investigations on China's steel exports.
Article 4 of the Announcement clearly stipulates that before taxpayers declare the export of taxable goods to the customs, they must complete the registration information confirmation at the tax department through the electronic tax bureau or the tax service hall. For taxpayers who have not completed the registration information confirmation or have tax abnormalities such as cancellation, abnormality, escape (loss of contact), they must first handle the relevant tax-related matters before they can go through customs procedures.
Article 5 stipulates that taxpayers who export taxable goods must first apply to the tax department for tax cancellation before applying to the market supervision department for cancellation, and apply to the market supervision department for cancellation of registration with the tax clearance certificate.