On October 19, the tax department exposed three cases of rectifying tax-related issues in the "invoicing economy", sending a clear signal to the whole society to crack down on tax-related violations and scientifically correct the "invoicing economy".
Why does it take a heavy blow to correct the "invoicing economy"?
"Invoicing economy" is not a normal market operation behavior. Some places use illegal subsidies to provide financial refunds, attract various platforms or "shell companies" engaged in invoicing business, and concoct "digital prosperity"; there are also some companies through "cyclic invoicing" and "mutual invoicing" between affiliated enterprises to artificially create the illusion of performance prosperity in order to obtain bank credit.
Judging from this exposed case, there are various methods of illegally enjoying financial subsidies by falsely issuing VAT invoices: some places illegally introduce invoicing companies to engage in "invoicing economy" by providing tax refunds; some use fictitious trade "circular invoicing" to trick state-owned enterprises into participating, leading to related Loans applied by state-owned enterprises from financial institutions face the risk of being irrecoverable; some criminal gangs register batches of shell companies with no actual business premises and no real business. By fabricating business transactions, they artificially inflate business performance and economic data, and obtain huge amounts of industrial support funds and financial rewards.
"The 'invoicing economy' is one of the outstanding manifestations of illegal investment promotion and regional 'involution' competition." Fan Yong, dean of the School of Finance and Taxation at the Central University of Finance and Economics, said that such shell invoicing companies have no real production and operation and do not need to bear substantial operating costs. They rely on bill arbitrage to squeeze the living space of compliant entity enterprises, forming a market ecology in which "bad money drives out good money", affecting the high-quality development of the local real economy. At the same time, the distorted economic data generated by false transactions will interfere with macroeconomic research and judgment and mislead industrial planning and public policy decisions.
Lu Bingyang, a professor at the School of Finance at Renmin University of China, said that my country's legal system provides a clear basis for the entire chain to correct the "invoicing economy", especially for identifying and cracking down on false invoicing to defraud financial subsidies. There is a clear governance closed loop that connects administrative supervision and criminal crackdowns in an orderly manner.
At present, the state implements negative list management of local financial subsidies, formulates a nationally unified negative list of local financial subsidies, and clarifies various situations in which local governments are prohibited from implementing financial subsidies. Lu Bingyang pointed out that various financial reward and subsidy projects must be strictly reviewed against the negative list for compliance review, and the payment of subsidies should comply with relevant regulations on financial management to effectively regulate financial subsidy behavior.
"Even if the financial subsidy has not been actually disbursed, the act of false invoicing itself can be convicted and punished. Fraudulent subsidy may constitute the crime of fraud or contract fraud." Lu Bingyang said that if an intermediary agency provides supporting documents or assistance for false invoicing, it will also bear criminal liability.
The heavy efforts to correct the "invoicing economy" have accelerated the exit of "shell" companies and made the data on business entities more solid. This will also help prevent industrial chain risks, financial risks and debt risks hidden behind "digital prosperity". The reporter learned from the State Administration of Taxation that in the first half of this year, companies that were found to have "invoicing economic" problems saw their invoice amounts drop by 37.7% year-on-year. As these invoicing "water" are squeezed out, the "tax included" in invoices per 100 yuan across the country has increased by 13.7% compared with 2025.
Correcting the chaos of "invoicing economy" is a systematic project. The tax department continues to strengthen communication and connection with the finance, State-owned Assets Supervision and Administration Commission, market supervision, financial supervision and other departments to carry out joint governance. Recently, the State Administration of Taxation and the State-owned Assets Supervision and Administration Commission of the State Council jointly issued a notice to further deepen departmental coordination, focus on key areas to strengthen supervision and law enforcement, and work together to promote scientific and precise correction of the "invoicing economy" problem of state-owned enterprises.
At the same time, the tax department continues to improve its working mechanism to effectively prevent any impact on normal business operations. On the one hand, it publishes a positive and negative list of compliance invoicing and delineates "standard lines" and "warning lines" to guide taxpayers' compliance; on the other hand, it formulates internal work guidelines for correcting tax-related issues related to the "invoicing economy" and guides tax authorities at all levels to optimize methods and standardize law enforcement. It is strictly forbidden to simply "one size fits all" and multiple measures are taken to ensure the normal invoicing needs of enterprises.
The State Administration of Taxation requires tax authorities in various regions to classify and handle the cases based on the risk level of the company's business operations and invoicing. Taxation departments in various regions have also actively strengthened coordination with relevant local departments to enhance the effectiveness of mutual supervision by gathering joint efforts in governance.
(Xinhua News Agency reporter Liu Kaixiong Source: Economic Information Daily)
