01
Introduction of real cases: invoice "red flushing" in the refined oil industry
(1) The case of false opening of refined oil products - 43,000 tons of gasoline "out of nothing".
In March 2022, the Inspection Bureau of the Xiantao Municipal Taxation Bureau received a major risk case source information from the superiors. According to the information, the names of the goods purchased and sold by the three energy trading companies of Xiantao City, Company F, Company R and Company T were inconsistent, and they were suspected of false invoicing. After conducting an investigation of the affiliation of the three companies, the inspectors found that there was also an energy trading company named Company J, which was registered at the same address and at the same time as Company T, and that its situation was very similar to that of the three companies, and that it was also engaged in the wholesale business of petroleum and related petrochemical products, and there were discrepancies between purchase and sale.
Subsequently, the inspectors used the tax control system and the invoice base account system to carefully analyze the input and output invoice data of the four companies involved, and found that the input invoices of the four companies were all from 8 petrochemical product companies in Zhoushan, Zhejiang, with a total of 2,236 copies, involving 40 kinds of petrochemical products with a total amount of 190 million yuan. The invoicing enterprises are all one enterprise - Wenzhou Y Petrochemical Company (hereinafter referred to as Y Company). Relevant information shows that on January 20, 2022, the four companies involved in the case issued a total of 200 special VAT invoices with a quantity of 43,000 tons and the product name No. 92 gasoline to Company Y, involving a total amount of 225 million yuan.
Why do these businesses invoice on the same day? The input information shows that the 8 upstream companies did not sell gasoline goods to 4 companies, how did they issue oil invoices? In the tax control system, the inspectors found that within a similar period of time, an enterprise named Huzhou M Petrochemical Trading Company (hereinafter referred to as "M Company") had issued 91 special VAT invoices for four companies with the product name No. 92 gasoline. The inspectors found that after obtaining the invoices issued by Company M, the four enterprises involved in the case quickly issued 200 special VAT invoices with the name of No. 92 gasoline to the downstream enterprises at one time, and after the four companies issued the invoices, the M company flushed the 91 special VAT invoices previously issued.
After careful and sufficient investigation and evidence collection by the case-handling personnel, the illegal methods and illegal facts of the enterprises involved in the case surfaced: the four enterprises involved in the case colluded with their upstream and downstream enterprises to fabricate the purchase and sale of oil products, and issued a total of 200 false VAT special invoices to downstream enterprises, involving an amount of 225 million yuan.
(2) The Linyi police cracked the first case of using red flushing to falsely issue special VAT invoices for refined oil
On May 28, 2021, the Economic Investigation Brigade of the Linyi County Public Security Bureau successfully cracked the "1.13" false VAT special invoice case, which is the first case in Texas that used red punching to falsely issue special VAT invoices for refined oil.
After investigation, from November 2020 to January 2021, Nie and others controlled shell companies such as a biofuel Co., Ltd. in Shandong, and used technical means to obtain a small amount of refined oil inventory, and then used red flushing to falsely increase the inventory of refined oil, and then falsely issued special VAT invoices for refined oil, causing huge losses in national taxes. The case involved more than 60 enterprises in 11 provinces, including Shandong, Guizhou and Jiangsu. After research and judgment, the special case group carried out a centralized network collection operation, smashed two criminal gangs that issued false invoices, and arrested 13 criminal suspects. The successful detection of the case has prevented the loss of state tax revenue in a timely manner and effectively cracked down on and deterred the arrogance of tax-related criminals.
02
The purpose behind the use of "red punching" means of false invoicing by refined oil enterprises
(1) The traditional method of changing tickets for consumption tax evasion
The above are all cases of using red flushing to inflate inventory data in the refined oil industry to achieve the effect of consumption tax evasion, and the analysis of its principle is inseparable from the discussion of tax-related risks and changes in the petrochemical industry. The mainland's refined oil industry is basically monopolized in the raw materials and sales links, and the refining and chemical enterprises have less say in the pricing of the refined oil industry, resulting in their disadvantages in the process of refining and chemical product competition, such as low production efficiency and production capacity, insufficient raw material resources, and may face a loss if they pay consumption tax, so a small number of refining and chemical enterprises have been evading consumption tax to obtain profits, which has been a problem for a long time.
Before the third phase of the Golden Tax and the launch of the refined oil module, as far as the traditional way of evading consumption tax is concerned, the first is to turn the production behavior into a pure trade behavior, which can be changed from the front end or the back end, such as purchasing crude oil, obtaining gasoline invoices through ticket change, and then issuing gasoline invoices to the outside world, so the book presents trade behavior rather than production behavior to evade consumption tax; The second is to change the production behavior of receiving raw materials excluding tax into the production behavior of receiving raw materials including tax, which is used to falsely offset consumption tax, mainly from the front-end to change tickets, such as changing crude oil invoices to fuel oil or naphtha invoices, and then issuing gasoline invoices, and then deducting the consumption tax contained in fuel oil or naphtha.
(2) After the refined oil module was launched, new ticket change modes emerged one after another
In order to fundamentally prevent the ticket change behavior of petrochemical trading enterprises, in January 2018, the State Administration of Taxation issued the Announcement on Issues Concerning the Collection and Administration of Consumption Tax on Refined Oil Products (Announcement No. 1 of 2018 of the State Administration of Taxation), and officially launched the refined oil invoice module system in March 2018. The refined oil invoice module has made significant restrictions and specifications on the use of refined oil invoices by trading enterprises and production enterprises. For trading enterprises, it is necessary to limit the entry and exit, that is, how much refined oil inventory in the module can issue how many refined oil invoices can be issued in the module, so as to restrict trading enterprises from arbitrarily changing their names. For refining and chemical enterprises, it is a deduction limit, that is, how much refined oil inventory in the module can be deducted in order to deduct how much consumption tax, but there is no name change restriction for refining and chemical enterprises. However, the fundamental problem of monopoly in the refined oil market will exist for a long time, and the need for refining and chemical enterprises to cut costs will always exist.
Based on this, the illegal and criminal invoicing of the petrochemical industry will not disappear, and many new modes of ticket change have emerged, such as the use of false inventory left over from history to issue external invoices, forged refined oil customs import payment documents to falsely increase inventory invoicing, outsourced processing tax arrears invoicing, the use of refined oil invoice red flush time difference for external invoicing, gas station surplus invoices back to refining and chemical enterprises, etc. Among them, the use of the red flush time difference of refined oil invoices is the new type of ticket change mode mainly discussed in this article.
(3) How does the red flushing mode use the time difference to inflate the inventory of refined oil modules?
For example, trading company A has an inventory of 50,000 tons, and issues a special VAT invoice with the product name "gasoline 95#" to trading company B for 50,000 tons, and company B writes an inventory of 50,000 tons in its refined oil module after obtaining the invoice. Initiated by Company B, Company A issues a special invoice with red letters, and Company A will "flush" the price and tax according to the original invoice, and Company A will restore 50,000 tons of inventory. Since then, the inventory of 50,000 tons has been returned to Company A through red flushing, and at the same time it has been retained in Company B.
After Company B has 50,000 tons of inventory in the refined oil module, it can issue a special VAT invoice with the name of "gasoline 95#". In order to solve the problem of insufficient VAT input tax, Company B usually inflats the special VAT invoices for various chemical products such as "dimethyl benzene". Due to the fact that the refined oil module is not connected with the input module, after making up the input, Company B can sell to Company C and transfer 50,000 tons of inventory to Company C, and Company C can issue an invoice for sales of "gasoline 95#" after distribution. In the above model, Company A continuously circulates and sells the refined oil inventory data through the means of red flushing, and after the red flushing, Company A's input and refined oil inventory are restored, and then the invoice is issued to the outside world in a circular manner and then red flushed. To sum up, the principle of the red flushing model is that the ticket changing gang uses the time difference and information gap between the refined oil module and the tax control system to falsely increase the inventory data.
03
What are the areas where the invoices issued by using the red flush to inflate the inventory are flowing?
Through the analysis of the case of red flushing false opening and related principles, it can be seen that its essence is consumption tax evasion. It should be made clear that the subject of consumption tax evasion is essentially the unit of billing. According to Huashui's observation, most of the invoices for refined oil inventories issued by Hongchong will not flow directly to the main institutions such as the two barrels of oil, nor will they flow to the large-scale private refining, and often flow to those smaller oil blending enterprises or trading enterprises with oil blending capacity. In fact, these enterprises do not have formal refined oil production procedures and refining qualifications, and at the same time, they have oil blending capabilities and hazardous chemicals production qualifications.
Why do such companies need invoices for refined oil inventory? The reason is that they often purchase gasoline and diesel components without consumption tax, obtain chemical invoices issued by upstream suppliers, and blend the component oil for the sale of refined oil for profit by renting oil tanks to implement physical blending. Specifically, from a process point of view, isooctane, MTBE, mixed aromatics, naphtha, xylene and other component oils can not be directly used as vehicle fuel, but after simple physical blending, gasoline that meets the national IV or even national V standards can be obtained. Therefore, from the perspective of the entire industry chain, the "scalping" behavior of the trading enterprises that implement the red flush is essentially to facilitate the evasion of consumption tax by downstream oil blenders, and from the perspective of the subjective and objective consistency of the criminal law, it is actually an act of helping to evade taxes. So how should this kind of behavior be evaluated in criminal law?
04
How should the various entities of the "red rush" type false invoicing be characterized?
(1) Based on the principle of consistency between subjectivity and objectivity, it is not appropriate to determine the crime of false issuance of special VAT invoices
Through the analysis of the above-mentioned transaction chain, it can be found that the social harm of the "red rushing" behavior focuses on the evasion of consumption tax, and has nothing to do with VAT. The purpose of downstream purchase invoices is not to deduct VAT, but to obtain refined oil inventory data, in essence, the main body of the transaction chain does not seek the benefits of VAT fraud, but the interests of evading consumption tax. In the above-mentioned transactions, all participating enterprises declare VAT in accordance with the law, and the input tax deducted in the next link, that is, the output tax paid in the previous link, and all the value-added amounts generated by the oil circulation link are dispersed to the enterprises for confirmation and tax declaration, and the purpose of such transactions is not to falsely offset the value-added tax. In other words, the use of false inputs to offset false outputs will not inherently result in a loss of national VAT. Therefore, based on the principle of consistency between subjectivity and objectivity, it is not appropriate to identify the "red rush" type of false issuance of special bills as a crime.
(2) Hongchong enterprises help downstream oil blenders to evade consumption tax, which is an aider to the crime of tax evasion
For downstream trading enterprises or production enterprises engaged in oil blending business with bills, it is a typical illegal and criminal act of tax evasion because of their consumption tax taxable behavior and failure to declare consumption tax in accordance with the law.
For suppliers who sell gasoline and diesel components in the upstream, the Ministry of Finance and the State Administration of Taxation Announcement No. 11 of 2023 stipulates that alkylated oil (isooctane) will be subject to consumption tax on gasoline; Consumption tax is levied on petroleum ether, crude white oil, light white oil, and some industrial white oil (No. 5, No. 7, No. 10, No. 15, No. 22, No. 32, and No. 46) according to solvent oil; Consumption tax is levied on mixed aromatics, heavy aromatics, mixed C8, stabilized light hydrocarbons, light oil, and light coal tar in accordance with naphtha. Therefore, the upstream supplier who sold the component oil in this type of case is also the subject of consumption tax evasion.
For enterprises that use red flushing to falsely increase the inventory data of refined oil products, they are helping downstream oil blenders to evade consumption tax, which is an aider to the crime of tax evasion, and it is more appropriate to deal with it as the crime of tax evasion. At the same time, it should be noted that for oil blenders, if the surplus chemicals are falsely issued to the outside world for profit, the part of the invoice obtained constitutes the crime of tax evasion, and the part of the false external profit-making chemical invoice should be punished as the crime of false special billing.
05
epilogue
By observing the above-mentioned case of invoice "red chong" in the refined oil industry, it can be found that the public security has handled it as a crime of false opening, and the red chong enterprise is characterized as the main body of false issuance, and the downstream oil blender and other enterprises have not been traced. Will such an investigation and punishment lead to many problems and inconsistencies? The answer is yes. First, there is a deviation between the characterization of the public security and the objective facts, and for the enterprises that use the red flushing method to falsely increase the inventory data of refined oil products, they are actually helping the downstream to evade consumption tax, which is an aider to the crime of tax evasion. Second, if the whole chain of downstream crackdowns is not carried out, the problem of consumption tax evasion cannot be fundamentally solved. In order to grab economic benefits, downstream oil blenders will continue to look for new red chong enterprises to issue false invoices and then distribute goods for external sales. Third, ignoring the investigation and punishment of downstream consumption tax evasion is not conducive to fundamentally protecting national tax revenue. If it is only a false investigation, the result is nothing more than the confiscation of illegal gains, which is the result that the local government is willing to see in order to increase fiscal revenue, but there is no main body in the whole chain to pay consumption tax, how can the national interests be protected? Only by cracking down on crime in the whole chain and identifying the main responsibility for consumption tax evasion by downstream oil blenders and other enterprises can the judicial authorities realize the root of the problem and truly protect the interests of the country.