The ＂two highs＂ clearly signed the ＂yin and yang contract＂ as a means of tax evasion Fan Bingbing and Zheng Shuang were once punished like this
On March 18, the Supreme People’s Court and the Supreme People’s Procuratorate jointly issued the "Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Tax Collection and Administration", which clarifies the standards for conviction and sentencing of various types of crimes that endanger tax revenue, punishes crimes according to law, protects the state’s tax interests, and maintains tax order. The "Interpretation" fromEffective from March 20.
The Interpretation makes clear the legal application of new criminal means.For the first time, the signing of "yin-yang contracts" is explicitly listed as a means of tax evasion.The "Interpretation" focuses on cases of tax evasion by fabricating false tax basis from time to time, especially in recent years, several cases in the field of entertainment that concealed or decomposed income and property in the name of others in the form of signing "yin and yang contracts" to evade taxes, which had a very bad impact. It clearly defines the signing of "yin and yang contracts" as one of the methods of tax evasion, providing a definite basis for judicial organs to handle such cases in the future.
In this year’s "Work Report of the Supreme People’s Court", it is clear that the adjudication standard of "yin and yang contracts": Implement the Civil Code well. Use the new system and new rules of the Civil Code properly, and lead the fashion with fair justice. Formulate the judicial interpretation of the general rules for contract compilation of the Civil Code,For the determination of the validity of the contract, the handling of "yin and yang contracts" and "misdeeds", etc., clear judgment standards,Carry forward the spirit of contract and promote arm’s length transactions.
So, what is a "yin and yang contract"? What are the legal regulations on "yin and yang contract" in our country? What are the typical cases in recent years? Read this article.
The purpose is to avoid paying taxes, what is a "yin-yang contract"?
"Yin-yang contract" refers to two or more contracts with different content on the same matter, one internal and one external. The external one is not the true meaning of both parties, nor will it be actually performed. It is usually used for filing or review by relevant administrative organs. The purpose of the parties signing the contract is to avoid supervision, reduce taxes, etc., which is generally called a "yang contract"; while the internal one is the true meaning of both parties, and it is also a contract performed by both parties, generally called a "yin contract".
According to Weng Xiaoping, a Kyoto law firm, "yin-yang contracts" (or "big and small contracts") are essentially two contracts between the parties to the contract on the same matter. One "yang/small contract" with a smaller amount is used to register with the competent authority for taxation; the other "yin/big contract" with a higher amount actually stipulates the transaction price between the two parties, and the purpose is to avoid the legal obligation to pay taxes.
What are the legal regulations on "yin and yang contract" in our country?How are penalties and penalties for evasion?
How effective is the "yin-yang contract"? The Civil Code says so
Regarding the validity of "yin-yang contracts", there are clear provisions in our country’s laws. Article 146 of the Civil Code stipulates that "a civil juristic act performed by the perpetrator and the counterparty with false intentions is invalid. The validity of a hidden civil juristic act expressed with false intentions shall be dealt with in accordance with relevant legal provisions."
What is tax evasion?"Tax Collection and Administration Law"It is stipulated like this
Once discovered, the tax authorities may impose administrative penalties on both parties for tax evasion in accordance with the Tax Collection and Administration Law.
Article 63 of the Tax Collection and Administration Law provides that a taxpayer who forges, alters, conceals, or destroys account books or accounting vouchers without authorization, or lists more expenditure or no or less income in the account books, or refuses to declare or makes false tax returns after being notified by the tax authorities, fails to pay or underpays the tax due, is tax evasion. If a taxpayer evades tax, the tax authority shall recover the tax or overpayment, and impose a fine of not less than 50% or not more than five times the tax not paid or underpaid; if a crime is constituted, criminal responsibility shall be investigated according to law.
If a withholding agent fails to pay or underpays the withheld or collected taxes by the means listed in the preceding paragraph, the tax authority shall recover the unpaid or underpaid taxes and late fees, and impose a fine of not less than 50% but not more than five times of the unpaid or underpaid taxes; if a crime is constituted, criminal responsibility shall be investigated according to law.
The latest judicial interpretation:Tax evasion of more than 100,000 yuan is the "larger amount" stipulated in the criminal law
If the behavior of both parties to the transaction violates the Criminal Law, it may constitute the crime of tax evasion.
Article 201 of the Criminal Law states that taxpayers use deception or concealment to make false tax returns or fail to declare, in order to avoid paying taxesLarge amountAnd those who account for more than 10% of the tax payable shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall also be fined;Huge amountAnd those who account for more than 30% of the tax payable shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, and shall also be fined.
The Criminal Law stipulates the "exemption clause for first-time offenders of tax evasion", that is, those who have been administratively punished by the tax authority for tax evasion for the first time and have not been criminally punished for tax evasion before, and who pay within the specified time limit after the tax authority issues a notice of recovery, will not be investigated for criminal responsibility according to law.
Teng Wei, a member of the Judicial Committee of the Supreme People’s Court and president of the Fourth Criminal Division, introduced that the judicial interpretation issued this time has raised the standard for conviction and sentencing for tax evasion. Article 2 of the Interpretation makes it clear that,Taxpayers who evade paying taxes of more than 100,000 yuan and more than 500,000 yuan shall be identified as "large amounts" and "huge amounts" as stipulated in Paragraph 1 of Article 201 of the Criminal Law, respectively.
The standards for determining whether the withholding agent does not pay or underpays the withheld and collected taxes are "large in amount" and "huge in amount" shall be in accordance with the provisions of the preceding paragraph.
You must know the cases of Fan Bingbing and Zheng Shuang signing the "yin and yang contract"
The tax department investigated and dealt with tax evasion issues such as Fan Bingbing’s "yin-yang contract" according to law
In early June 2018, the public reported Fan Bingbing’s "Yin and Yang Contract" tax-related issues. Fan Bingbing actually received 30 million yuan in the filming of the movie "Big Bombing", of which 10 million yuan has been declared for tax, and the remaining 20 million yuan has evaded personal income tax 6.18 million yuan by splitting the contract, and underpaid business tax and additional 1.12 million yuan, totaling 7.30 million yuan. In addition, Fan Bingbing and his company as the legal representative were found to have underpaid 248 million yuan in taxes, of which 134 million yuan was evaded.
For the above-mentioned illegal acts, according to the jurisdiction designated by the State Administration of Taxation, the Jiangsu Provincial Taxation Bureau shall, in accordance with the provisions of Articles 32 and 52 of the Tax Collection and Administration Law of the People’s Republic of China, recover the tax of 255 million yuan from Fan Bingbing and his enterprise as the legal representative, and charge a late fee of 33 million yuan; according to the provisions of Article 63 of the Tax Collection and Administration Law of the People’s Republic of China, Fan Bingbing shall be fined 4 times the tax evasion by means of splitting the contract to conceal the real income 240 million yuan, and shall be fined 3 times the tax evasion by using the studio account to conceal the real nature of personal remuneration 239 million yuan; and shall be fined 946,000 yuan for the evasion of taxes by undercounting the income of the enterprise as the legal representative Article 93 of the Detailed Rules for the Implementation of the Tax Collection and Administration Law of the People’s Republic of China stipulates that the two enterprises that they serve as legal representatives shall be fined 0.5 times for failing to withhold and pay personal income tax and illegally providing facilities to assist in underpayment of tax, which shall be 51 million yuan and 65 million yuan respectively. Details > > >
The Shanghai Municipal Tax Department shall handle Zheng Shuang’s tax evasion case according to law
In early April 2021, the First Inspection Bureau of the Shanghai Municipal Taxation Bureau accepted the issue of Zheng Shuang’s suspected tax evasion in accordance with the law, and carried out a comprehensive and in-depth inspection of Zheng Shuang’s suspected tax evasion using the "Yin and Yang Contract", as well as the performing arts projects and related enterprises and personnel tax-related issues that Zheng Shuang participated in after standardizing the tax order of the film and television industry in 2018.
After investigation, Zheng Shuang starred in the TV drama "A Thousand Women’s Ghost" in 2019, and the producer agreed that the salary was 160 million yuan, and the actual obtained 156 million yuan. He did not make tax declarations truthfully according to law, evaded taxes 43.027 million yuan, and other underpaid taxes 16.1778 million yuan. At the same time, it was found that Zheng Shuang had other performing arts income 35.07 million yuan, tax evasion 2.2426 million yuan, and other underpaid taxes 10.3429 million yuan. In total, Zheng Shuang did not declare personal income 191 million yuan, tax evasion 45.2696 million yuan, and other underpaid taxes 2652.07 million yuan from 2019 to 2020.
Zheng Shuang’s above actions violated the requirements of the Central Propaganda Department, the Ministry of Culture and Tourism, the State Administration of Taxation, the State Administration of Radio and Television, the State Film Administration and other departments since 2018 to strictly prohibit the film and television industry from "sky-high salaries" and "yin and yang contracts". Tax evasion is subjective and intentional, seriously disrupting the order of tax collection and management, and violating relevant tax laws and regulations. The tax department will deal with it strictly in accordance with the law.
The First Inspection Bureau of the Shanghai Municipal Taxation Bureau, in accordance with relevant laws and regulations such as the Law of the People’s Republic of China on the Administration of Tax Collection, the Law of the People’s Republic of China on Individual Income Tax, and the Interim Regulations of the People’s Republic of China on Value-Added Tax, imposed a total fine of 299 million yuan on Zheng Shuang. Zheng Shuang did not raise any objection when the tax department served the administrative punishment decision, saying that he would not reconsider or sue, and had paid all the taxes and late fees within the specified time limit. The tax department is urging him to pay the fine within the specified time limit according to law.
At the same time, the tax department found that one of the informants in this case, Zhang Heng, as the broker of Zheng Shuang’s "A Thousand Women’s Ghost" project, was suspected of planning the splitting contract of the 160 million yuan agreed salary, establishing a "cover company" and other matters, and directly operating the specific implementation of the contract, collection and other activities to help Zheng Shuang evade taxes. The First Inspection Bureau of the Shanghai Municipal Taxation Bureau has filed a case for inspection according to law, and will deal with it separately according to law. In addition, the relevant enterprises are suspected of providing convenience for Zheng Shuang to split the contract, conceal the salary, and helping Zheng Shuang evade taxes and other tax-related violations. The tax department has also filed a separate case according to law.
Source: Xinhua News Agency, WeChat official account of the Supreme People’s Court, official website of the State Administration of Taxation
Editor, Changjiang
Proofreading, Liu Yue