Inspection Bureau of Urumqi Taxation Bureau, State Administration of Taxation
Announcement on the Service of the Notice of Tax Administrative Penalty Matters
Wu Shui Ji Announcement [2024] No. 20
Xinjiang XX Real Estate Development Co., Ltd. (taxpayer identification number: omitted):
Due to the use of direct service, lien service, entrusted service, mail service, etc., it is impossible to serve the tax documents to your unit. In accordance with the provisions of Article 106 of the Detailed Rules for the Implementation of the Law on the Administration of People's Republic of China Tax Collection, the "Notice of Tax Administrative Penalty Matters" (Wu Shui Ji Zhi Zhu [2024] No. 45) is hereby announced to your unit.
Please go to Room 402 of the Inspection Bureau of the Urumqi Municipal Taxation Bureau of the State Administration of Taxation to collect the original document of the Notice of Tax Administrative Penalty within 30 days from the date of this announcement. Otherwise, it will be deemed to have been served after 30 days from the date of announcement.
Address: No. 61, Xinhua South Road, Tianshan District, Urumqi City
Contact number: 0991-2668931 Contact: Yang and Huang
The announcement is hereby made.
Attachment: Notice of Tax Administrative Penalty Matters (Wu Shui Ji Zhi Zhu [2024] No. 45)
Inspection Bureau of Urumqi Taxation Bureau, State Administration of Taxation
June 3, 2024
Inspection Bureau of Urumqi Taxation Bureau, State Administration of Taxation
Notice of tax administrative penalty matters
Wu Tax Penalty Notice [2024] No. 45
Xinjiang XX Real Estate Development Co., Ltd. (taxpayer identification number: omitted):
In accordance with Article 8 of the Law on the Administration of People's Republic of China Tax Collection and Administration, Articles 44, 63 and 64 of the Law on the Administration of People's Republic of China Tax Collection, the relevant matters are hereby notified as follows:
The facts, reasons, and basis of the tax administrative penalty and the penalty decision to be made
(1) Facts of the violation
On November 28, 2012, with the approval of the Ministry of Commerce, your unit established a wholly-owned subsidiary, Hope Star LLC (hereinafter referred to as HS Company), in United States, and remitted a total of 7 million US dollars of investment funds to HS through banks from 2013 to 2016, and your unit owns 100% of the equity of HS Company. According to the information provided by the United States tax department after the special information exchange, your organization transferred 40% of the shares of HS to Package Butler Corp (hereinafter referred to as PBC Company) on December 10, 2016 for a transfer price of $100; On November 5, 2018, the company transferred 60% of its equity interest in HS to PBC at a price of US$750,000. Your unit applies for deducting US$6.25 million (700-75=US$6.25 million) and RMB40,221,820.00 as equity investment losses included in the pre-tax deduction items in 2018, and when your unit fills in the pre-tax deduction schedule of equity (equity) investment losses (special declaration), it shows that the net assets of the investee are 8,096,179.68 yuan. According to the balance sheet data of HS Company from 2016 to 2018 provided by the United States tax authorities, the total equity in 2016 was US$8,608,572.54, the total equity in 2017 was US$8,843,217.77, the total equity in 2018 was US$8,008,805.86, and the initial investment was US$7,000,000.00, confirming that HS Company did not incur a loss at the time of the equity transfer. In November 2023, our bureau again requested the State Administration of Taxation for information exchange, and through the feedback of the United States reply letter, your unit established a wholly-owned subsidiary in United States HS Company The equity transfer of HS Company in 2016 and 2018 was not completed, and the HS Company did not have an equity transfer, and there was no problem of deducting equity transfer losses before enterprise income tax. According to Article 8 of the People's Republic of China Enterprise Income Tax Law and Article 32 of the Detailed Rules for the Implementation of the People's Republic of China Enterprise Income Tax Law, there is no equity transfer in your unit, and there is no problem of deducting the loss of equity transfer before enterprise income tax.
In 2018, your unit self-declared operating income was 212,964,562.44 yuan, operating cost was 143,809,641.39 yuan, investment income was -40,221,820.00 yuan, taxable income was 1,765,834.38 yuan, and tax payable was 441,458.60 yuan. Your unit has not incurred equity transfer losses, and the investment income of -40,221,820.00 yuan is not deductible before tax, and the taxable income should be increased, and the taxable income in 2018 is 41,987,654.38 yuan, and the taxable amount is 10,496,913.60 yuan. The enterprise income tax of RMB 10,055,455.00 should be paid.
The above illegal facts are confirmed by the following evidence: corporate income tax return, the response of the United States tax department after the special information exchange, the HS company's 2018 balance sheet, and the response of the United States tax department after the second special information exchange.
(2) The legal basis and the punishment decision to be made
Your unit's false tax declaration, resulting in underpayment of enterprise income tax, meets the definition of tax evasion in the first paragraph of Article 63 of the Law on the Administration of People's Republic of China Tax Collection, and should be characterized as tax evasion. In accordance with the first paragraph of Article 63 of the Law on the Administration of People's Republic of China Tax Collection, Article 34 of the Law on People's Republic of China Administrative Penalties (Decree No. 70 of the President of the People's Republic of China) and the "About Release<乌鲁木齐市税务行政处罚裁量基准>". According to the provisions of Item 16 of the Announcement of the Urumqi Municipal Taxation Bureau (Announcement No. 4 of 2018 of the Urumqi Municipal Taxation Bureau) and the annex "Discretionary Criteria for Tax Administrative Penalties in Urumqi City", the degree of illegality of your unit's tax evasion in 2018 is "serious", and it is proposed to impose a fine of 50% of the underpayment of tax of 10,055,455.00 yuan on your unit, that is, 5,027,727.50 yuan (Wu Bai 0 2 Wan Qi 2 Shi Qi Yuan Wu Jiao).
2. Your unit has the right to make statements and defenses. Please go to our bureau to make a statement or defense or provide statement and defense materials before our bureau makes a tax administrative penalty decision; If a statement or defense is not made within the time limit, it shall be deemed to have waived the right.
3. If you intend to impose a fine of more than 10,000 yuan (including 10,000 yuan) on your unit, or meet other circumstances stipulated in Article 63 of the Administrative Punishment Law of the People's Republic of China, your unit has the right to request a hearing. You can submit a written application for hearing to our bureau within five working days from the date of receipt of this notice; If the request is not made within the time limit, it will be deemed that the right to a hearing is waived.
Inspection Bureau of Urumqi Taxation Bureau, State Administration of Taxation
May 21, 2024
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