1. Historical Evolution and Revision Background of the Crime of Tax Evasion

In 2002, Liu Xiaoqing was detained in a detention center for 422 days for evading more than 14.58 million yuan in taxes for herself and her company, while in 2018, Fan Bingbing and her company evaded 248 million yuan in taxes and were not held criminally responsible after paying a total of 883 million yuan in back taxes and fines. Zheng Shuang and her company, who just announced that they had evaded more than 71.79 million yuan in taxes, will not be held criminally responsible if they pay a total of 299 million yuan in back taxes and fines on time. Both are cases of celebrities evading taxes. The amount of tax evaded by Fan Bingbing and Zheng Shuang far exceeded that of Liu Xiaoqing in those years. The reason why they had the opportunity to escape imprisonment is that the criminal law has changed the crime of tax evasion to the crime of tax evasion.

On February 28, 2009, the Seventh Session of the Eleventh National People's Congress Standing Committee deliberated and approved the "Amendment to the Criminal Law (VII)." This amendment made significant revisions to Article 201 of the Criminal Law regarding the crime of tax evasion, changing the name of the crime to tax evasion. Although the term "tax evasion" is widely used in the field of tax administration, it has since been removed from the criminal field. The crime of tax evasion in the 1997 Criminal Law stipulated the constituent elements of the crime and the standards of punishment in a listed manner. With the development of the social economy and the continuous improvement of the legal system, the original criminal law clauses on the crime of tax evasion have become increasingly unable to adapt to the changes in the situation, mainly reflected in the following aspects.

First, the expression is too complicated, which has caused differences in understanding in law enforcement practice, including whether the constituent elements have all the conditions listed in the article, or as long as one of the conditions is met, especially whether "refusal to declare after being notified by the tax authority" is an independent act constituting the crime of tax evasion or an essential condition for constituting the crime of tax evasion is often understood differently in theory and practice, and the differences are very large.

Second, with economic development, the means of tax evasion are becoming increasingly diversified. Whether a taxpayer commits a crime if he uses means of tax evasion that are not listed in the article is also often raised. On the other hand, the constituent elements of the crime of tax evasion require that both the proportion and the amount be met at the same time, but there is a gap between the two sentencing levels. In practice, the amount exceeds the previous level, but does not reach the proportion of the next level. If understood solely from the meaning of the text, the tax evasion crime law does not stipulate this situation, but it would be unfair not to convict. Therefore, whether to convict and which level to sentence has caused controversy.

Third, the threshold for the crime of tax evasion is too low. According to the law, a person is subject to imprisonment of up to three years or criminal detention if the tax evasion amount is between 10% and 30% of the tax payable and exceeds 10,000 yuan but is less than 100,000 yuan. Although the Supreme People's Court raised the minimum threshold for tax evasion to 50,000 yuan in its "Interpretation on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases of Tax Evasion and Resistance" on December 4, 2002, the scope of prosecution is ever increasing as the economy develops and taxpayers' incomes rise. This is due to the strict enforcement of the standards for the crime of tax evasion stipulated in the Criminal Law and judicial interpretations.

Fourth, there is a work overlap between the public security and tax inspection departments in investigating and handling tax evasion cases. If the public security organs intervene in the investigation of enterprises or individual businesses before it is clear whether the reported tax evasion behavior exists and constitutes a crime, it will inevitably have a negative impact on the reputation and production and operation activities of the enterprises or individual businesses.

Fifth, the negative effects of the crime of tax evasion are significant. If an enterprise evades taxes up to a certain amount and proportion, once discovered, regardless of whether the enterprise actively pays the tax and late payment fees and accepts the fine, it will be convicted. This may lead to the bankruptcy of the enterprise, the layoff of workers who need to be resettled, and the imprisonment of the enterprise boss for tax evasion. This approach is not beneficial to the country, society, enterprises, and individuals, and is not conducive to building a harmonious society.

Sixth, judging from the way developed countries in the world deal with tax evasion, they generally adopt the principle of mainly non-criminal penalties, and the proportion of convictions is very low. In addition, with the development of my country's economy, the degree of harm to society caused by the same amount of tax evasion is also different in different periods, and the criminal policy of combining leniency and severity should also be reflected in crimes that endanger the order of national tax administration.

  2. The main changes of the crime of tax evasion compared to the original crime of tax evasion

Starting from the purpose of maintaining the order of tax collection and management, ensuring national tax revenue, and at the same time helping to promote taxpayers to actively fulfill their tax obligations in accordance with the law, the Amendment to the Criminal Law (VII) made major revisions to the crime of tax evasion:

First, the description of the crime was revised, and the name of the crime was changed from "crime of tax evasion" to "crime of tax evasion," and the term "tax evasion" was no longer used, but was replaced by "evading the payment of taxes."

Second, the means of tax evasion are no longer specifically listed, but a general description is adopted: "Taxpayers use deception and concealment to make false tax declarations or fail to declare" to adapt to the various complex situations that may occur in practice to evade the payment of taxes.

Third, the specific amount standard for constituting a crime if the amount of tax evaded accounts for more than 10% of the amount of tax payable, and the specific amount standard for constituting a huge amount if the amount of tax evaded accounts for more than 30% of the amount of tax payable are no longer stipulated. It is more appropriate for the law not to stipulate the amount specifically, but to leave it to the judicial organs to make judicial interpretations based on the actual situation and adjust them in a timely manner.

Fourth, special clauses for not pursuing criminal responsibility are stipulated for first-time offenders of the crime of tax evasion. First-time offenders who have evaded the payment of taxes up to the prescribed amount and proportion standards and have already constituted a crime may not be held criminally responsible if the following three prerequisites are met: First, after the tax authority issues a notice of recovery in accordance with the law, the tax payable is paid; second, the late payment fee is paid; third, the tax authority has imposed administrative penalties.

Fifth, the circumstances under which criminal responsibility is not exempted for reaching the amount and proportion standards for the crime of tax evasion are also stipulated. The phrase "except for those who have been subject to criminal punishment for evading the payment of taxes within five years or have been given two administrative penalties by the tax authority" in the fourth paragraph reflects the legislative idea of ​​severely punishing those who have repeatedly refused to mend their ways after engaging in tax evasion.

3. Discussion on whether to initiate the special clause for non-prosecution of criminal liability in this case

The crime of tax evasion is an administrative crime, which originates from serious tax evasion in violation of the "Tax Collection and Administration Law" that has reached the criminal filing standard. After the first-time offender pays the tax and late payment fee, the tax authority must also impose an "administrative penalty" before criminal responsibility is not pursued. In this case, the author found the following points in the judgment document, and there are doubts about whether the tax authority has completed the administrative disposal procedure.

First, in the evidence materials published in this case, the document used by the tax authority is the "Tax Matters Notice," which contains the content of notifying Lou to go to the tax authority to declare and pay taxes on January 30, 2014, and legal responsibility will be pursued if the payment is overdue. However, the specific amount of tax evasion determined for Lou was not finally determined until the second instance, and the corresponding document was an internal investigation report, and a clear "Tax Processing Decision" determining the tax and late payment fees to be paid was never issued to Lou, and a "Tax Penalty Decision" was not issued for the tax violation. Now there is insufficient evidence to prove that the tax authority has completed the administrative disposal procedure for Lou's tax evasion.

Secondly, even if the 'Tax Notice' recorded the tax and late payment fees that Lou should have paid, according to the 'Notice on Printing and Distributing the National Unified Tax Law Enforcement Document Styles' (Guo Shui Fa [2005] No. 179), if the tax authority uses the 'Tax Notice' to notify taxpayers, withholding agents, and tax guarantors to pay taxes and late payment fees, the notified person should be informed that if they disagree with this notice, they can apply to the tax authority for administrative reconsideration according to law within sixty days from the date of receiving this notice after paying the required tax and late payment fees. However, based on the evidence shown in the published case, the Tax Notice sent by the Yiwu Local Taxation Bureau to the original defendant Lou via EMS express was signed by Lou's wife on January 27, 2014, and Lou was arrested on March 11, 2014, only 42 days apart, which was still within the statutory period for administrative reconsideration, and the amount of tax payable was still in an uncertain state. The judicial authorities believe that the defendant Lou did not voluntarily declare the tax until March 11, 2014, which was an act of evasion, and the facts are unclear.

Thirdly, the published evidence shows that the special clause was not initiated before entering the criminal procedure in this case. The tax inspection visa, the Yiwu Local Taxation Bureau's transfer letter regarding Lou's suspected tax evasion, the investigation report, the postal express bill, and the tax notice all confirm that the Yiwu Local Taxation Bureau express delivered the tax notice to a certain room in a certain unit in a certain building in a certain village in a certain street in Yiwu City on January 26, 2014, and it was properly delivered on January 27, 2014; The Yiwu Local Taxation Bureau Inspection Bureau was unable to notify the defendant Lou multiple times via mobile phone text message and telephone, and after postal delivery and signing, it decided to transfer the defendant Lou to the public security organ to pursue criminal responsibility on January 27, 2014. The document was properly delivered on the same day and transferred to the public security organ on the same day. In fact, Lou had no opportunity to accept tax administrative handling and punishment.

This case is an example of a natural person evading the payment of private loan interest and ultimately constituting tax evasion and being criminally punished. After the 'Criminal Law Amendment (VII)', the crime of tax evasion has set special provisions for lenient treatment for tax evaders who should be held criminally responsible. This is an important link for tax evaders to avoid imprisonment. Tax administrative organs and judicial organs should not omit relevant administrative disposal procedures and reduce the rights granted to citizens by law. This is also the content that defense lawyers in tax evasion cases should focus on after entering the criminal procedure. The Supreme People's Court issued typical cases (third batch) protecting property rights and the legitimate rights and interests of entrepreneurs: The tax evasion case of Hubei Mou Mou Environmental Engineering Co., Ltd. and Li Mouming emphasized the necessity of prior administrative disposal for the crime of tax evasion. After retrial by the Supreme People's Court's instruction, the Hubei Provincial High People's Court retrial held that the original judgment's finding that Hubei Mou Mou Environmental Engineering Co., Ltd. underpaid taxes was clear in fact and the evidence was reliable and sufficient, but the application of law was incorrect. This case directly pursued the criminal responsibility of Hubei Mou Mou Environmental Engineering Co., Ltd. and Li Mouming's individual without administrative disposal procedures, which does not comply with the relevant provisions of the 'Criminal Law Amendment (VII)'. Based on this, the Hubei Provincial High People's Court retrial judgment revoked the original judgment and declared Hubei Mou Mou Environmental Engineering Co., Ltd. and Li Mouming innocent.