On June 26th, an academic seminar titled "Judicial Application of the Crime of Issuing False Invoices" was successfully convened in Beijing, under the auspices of the Criminal Law Teaching and Research Center at Beijing Normal University's Law School. Esteemed experts and scholars from the Legal Working Committee of the Standing Committee of the National People's Congress, the Supreme People's Court, Peking University, Renmin University of China, Beijing Normal University, and other institutions were in attendance. The seminar aimed to delve into the judicial implications of the crime of issuing false invoices through interdisciplinary discourse involving finance, taxation law, and criminal law, with the objective of providing theoretical insights to inform practical advancements in addressing this criminal offense.
At the beginning of the conference, Professor Yuan Bin, a professor at the College for Criminal Law Science of Beijing Normal University and executive director and deputy secretary general of the China Criminal Law Research Association, briefly introduced the purpose of the conference as the moderator. He pointed out that in the context of the "Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Harmful Tax Collection and Management" (hereinafter referred to as the "Judicial Interpretation") issued by the Supreme People's Court and the Supreme People's Procuratorate in March 2024, which clearly defines the criminal offense of issuing value-added tax special invoices that do not aim to defraud tax credits and do not cause tax losses due to deduction, whether the act of issuing ordinary invoices under the same circumstances, environment, and purpose should be treated as a crime has become a very prominent practical issue in China's judicial practice, and consensus urgently needs to be reached. Subsequently, Professor Zuo Jianwei, Director of the Criminal Law Teaching and Research Center at the Law School of Beijing Normal University, delivered a passionate speech and pointed out that based on past judicial practice, it is necessary to restrict the judicial application of the crime of issuing false invoices. This seminar holds significant practical relevance and profound theoretical value.
This seminar delved into a comprehensive examination of the legal implications associated with the crime of issuing false invoices. Key topics of discussion included the safeguarding of legal interests under this crime, the intrinsic nature of the act of issuing false invoices, the interplay between the crime of issuing false invoices and the offense of issuing false value-added tax special invoices. Additionally, the seminar explored whether the act of issuing false invoices for non-tax-related purposes, such as financing, which does not result in national tax losses, should be deemed a criminal offense. The participants also debated the merits of imposing appropriate limitations on the crime of issuing false invoices.
Liu Jianwen, a professor at Peking University Law School and president of the Finance and Taxation Law Research Association of the China Law Society, highlighted that the act of issuing false invoices should not be automatically classified as a criminal offense. Instead, he advocated for a nuanced analysis that hinges on whether the act has resulted in national tax losses. Professor Liu explained that if the amounts and transactional benefits recorded on ordinary invoices are not factored into the enterprise's costs, thus leading to a reduction in corporate income tax and other levies, such actions do not result in, nor pose a risk of, national tax losses. Consequently, he suggested that administrative penalties, as stipulated by the "Invoice Management Measures," would be appropriate, obviating the need for criminal law intervention.
Zhu Daqi, a professor of the Law School of Renmin University of China and vice chairman of the Finance and Tax Law Research Society of the China Law Society, pointed out that the view that the legal interests of the crime of false invoicing only include the order of tax collection and management is incorrect and incomplete, and is not conducive to the accurate and reasonable identification of the crime of false invoicing in judicial practice. The offense of issuing false invoices must also consider the interests of national taxation. On the one hand, the Criminal Law delineates the crime of issuing false value-added tax special invoices under Article 205, and the crime of issuing false invoices as Article 205-1, suggesting that the violation of legal interests in these two crimes is of a similar or identical nature. On the other hand, both offenses are categorized under the heading of "Crimes Endangering Tax Administration," which implies that Endangering Tax Administration encompasses not only the disruption of the Tax Administration Order but also the compromise of the National Tax Interests that underpin this order. If it is believed that the crime of issuing false invoices only endangers the order of tax administration and ignores the national tax interests, it not only fails to reflect the social harm of issuing false invoices, but also makes it difficult to specifically measure and evaluate its social harm. In addition, although ordinary invoices cannot be used to offset taxes, the view that ordinary invoices are only related to tax administration order and not related to national tax interests is one-sided. Ordinary invoices have accounting functions and serve as proof of taxpayers' income costs. They have a significant impact on corporate income tax, personal income tax, land value-added tax, stamp duty, etc. Therefore, the crime of issuing false invoices is still related to national tax interests. At the same time, the significant difference in sentencing between the crime of issuing false invoices and the crime of issuing special invoices for false value-added tax is only due to the highest importance of value-added tax and the corresponding maximum punishment, rather than the fact that the legal interests of the crime of false invoices do not include national tax interests. On this basis, the judicial application of the crime of issuing false invoices should be limited from the aspects of behavioral purpose, consequences, and the real danger of tax benefits, otherwise it would violate judicial fairness. In essence, the reasons for issuing false invoices are also diverse, and the consequences can vary greatly. If we only examine the behavior without examining whether it will cause national tax losses, we will come to the absurd conclusion that the act of issuing false ordinary invoices should be punished uniformly.
Shi Yan'an, Director of the Criminal Law Science Research Center of Renmin University of China and Vice President of the China Criminal Law Research Association, pointed out that the judicial application of the crime of false invoicing should be made clear through the three levels of normative purpose, interpretation method and policy. Firstly, the legal interest or regulatory protection purpose of the crime of issuing false invoices should rely on the pre-existing law, which is mainly used to protect the order of tax collection and management and the national tax interests. Therefore, the act of concealing the financing purpose through false invoicing is not the regulatory object of the crime of issuing false invoices. The criminal law should evaluate whether the financing purpose itself constitutes a crime. Secondly, the crime of issuing false invoices should cover national tax interests, whether from a systemic or natural perspective. On the one hand, from the perspective of system interpretation, the crime of issuing false invoices is closely related to the crime of issuing false value-added tax special invoices, and therefore cannot be explained separately from the crime of issuing false value-added tax special invoices. That is to say, the crime of issuing false invoices should also be limited purposefully in conjunction with national tax interests. On the other hand, from the perspective of natural interpretation, the crime of falsely issuing value-added tax special invoices is a serious crime, and it does not constitute a crime without causing national tax losses. As a minor crime, the crime of falsely issuing invoices cannot also constitute a crime in the same situation, otherwise it would violate the rule of "highlighting a trivial matter by referencing a significant issue" in principles of lenient interpretation in criminal law. In addition, the crime of falsely issuing invoices requires "serious circumstances", which means that this crime has stronger restrictive requirements compared to the crime of falsely issuing value-added tax special invoices. Therefore, it should also emphasize the restrictive significance of national tax losses in the criminal offense of falsely issuing invoices. Finally, the crime of issuing false invoices takes into account the national tax interests, which is more in line with the distinction between administrative penalties and criminal sanctions at the policy level. The crime of issuing false invoices is a statutory offense, therefore administrative penalties should be given priority in policy. Only when it has the purpose or result of causing national tax losses, is it necessary to impose criminal sanctions as a crime.
Gao Guijun, a former member of the Judicial Committee of the Supreme People's Court, ex-chief judge of the Fifth Criminal Division, and professor at the National Judges College, posits that when the "Judicial Interpretation" acknowledges the crime of issuing false value-added tax special invoices with the intent to defraud national taxes, the crime of issuing false invoices should be interpreted in an analogous manner. This perspective is grounded in the fact that, on the one hand, Article 205-1 of the Criminal Law (crime of issuing false invoices) and Article 205 (crime of issuing false value-added tax special invoices) are codified in contiguous provisions, with the former serving as a supplementary clause to the latter. Consequently, there should not exist two entirely distinct standards, and interpretations should be consistent or parallel. On the other hand, Article 205 of the Criminal Law establishes a hierarchy between lesser and more serious offenses. If the interpretive outcome for a lesser offense (exonerate) is more severe than that for a more serious offense (not exonerate), it contravenes the principle of proportionality between the crime and the punishment. Therefore, the crime of issuing false invoices should also be predicated on the fundamental criterion of having the intent or consequence of causing national tax losses. Consequently, the act of issuing false invoices for the purpose of financing, which does not aim to incur national tax losses, should be subject to administrative penalties in accordance with the "Invoice Management Measures," obviating the necessity for criminal prosecution.
Huang Taiyun, former Deputy Director of the Criminal Law Office at the Law Working Committee of the Standing Committee of the National People's Congress, and a professor at the Law School of Tianjin University, proposed that the framework for tax collection and management should encompass national tax interests. Furthermore, he argues that the offense of issuing false invoices should be evaluated based on a crucial criterion: whether it results in national tax losses, which is a significant factor in determining the violation of legal interests. Moreover, the crime of issuing false invoices is not a criminal offense, and its provision of "serious circumstances" makes the act of issuing false invoices in criminal law significantly different from that in administrative law. Therefore, an independent evaluation of whether the act of issuing false invoices constitutes a crime should be conducted in conjunction with national tax interests. In addition, for other illegal and criminal activities associated with the act of issuing false invoices, convicting based on their intended behavior can achieve regulatory purposes, and there is actually no need to separately deal with the act of issuing false invoices. In other words, only when the act of issuing false invoices causes national tax losses, is there a need for separate evaluation. Based on this, the act of issuing false invoices for financing purposes, if it does not cause any loss of national tax revenue, does not meet the basic requirement of "serious circumstances" for the crime of false invoicing, and there is no need for separate disposal. The most appropriate disposal method is to only impose administrative penalties.
Professor Zuo Jianwei, Director of the Criminal Law Teaching and Research Center of the Law School at Beijing Normal University, and President of the China Criminal Law Research Association, highlighted that even with the issuance of the Judicial Interpretation, the crime of issuing false invoices should not be automatically deemed a criminal offense. Instead, its consideration should be tied to the protection of national tax interests. He argued that if the Judicial Interpretation fails to explicitly address the crime of false invoicing—specifically, the act of issuing false invoices to exaggerate performance, secure financing, or obtain loans without evading taxes and without resulting in tax fraud losses from deductions—then deeming any false invoicing that does not aim to cause national tax losses as a criminal act would undermine the consensus laboriously achieved by both theoretical and practical circles. This consensus holds that false invoicing of value-added tax special invoices, absent a tax evasion purpose, does not lead to national tax losses and should not be criminalized. Indeed, such a one-sided interpretation represents a judicial retrogression, as the absence of limitations based on national tax loss would excessively broaden the scope of criminal liability for false invoicing. From a practical standpoint, without the constraint of national tax damage, behaviors that do not inflict social harm—or even those that benefit society, such as issuing false invoices for financing to stimulate economic vitality—would be unfairly criminalized. Furthermore, in numerous instances, the issuance of false invoices is an unavoidable necessity, as when legal invoices cannot be issued due to objective constraints. To categorically treat false invoicing as a crime under such circumstances would unnecessarily hinder the progress of the social economy.
Yuan Bin, a professor at the College of Criminal Law Science at Beijing Normal University and Executive Director as well as Deputy Secretary-General of the Chinese Criminal Law Research Association, underscored that the language of Articles 205 and 205-1 of the Criminal Law positions the crime of issuing false value-added tax special invoices as parallel to the crime of issuing false invoices. Specifically, false invoicing, as defined outside the scope of Article 205, is not distinguished by common versus special law but rather coexists and constitutes a unified whole within the offense of false invoicing. Consequently, a comprehensive perspective is essential for the judicial application of the crime of false invoicing. Firstly, from a systemic standpoint, the non-punishment of acts of issuing false value-added tax special invoices that do not result in national tax losses, and the inconsistent treatment of similar situations under the crime of issuing false invoices, would violate the systematic integrity of legal provisions and create an incongruity in the severity of the two crimes. Secondly, considering functional requirements, there is a significant overlap between the crimes of issuing false invoices and issuing false value-added tax special invoices in terms of their functionality. It is both unreasonable and inequitable to afford differing levels of protection within this overlapping domain. Lastly, in instances where both financing-oriented fraudulent invoicing and value-added tax special invoice fraud are present, the failure to limit the crime of fraudulent invoicing based on national tax losses would lead to the absurdity of treating the issuance of false value-added tax special invoices as non-criminal while penalizing the issuance of false ordinary invoices as a crime. Moreover, the legislative inclusion of the "serious circumstances" element in the crime of issuing false invoices suggests that the legislative threshold should be higher than that for the crime of issuing false value-added tax special invoices. Therefore, the act of issuing false ordinary invoices, absent the intent or consequence of causing national tax losses, should not be deemed a criminal offense.
Subsequently, the attendees spoke freely. Finally, Professor Yuan Bin, the host, provided a brief summary of the meeting. He stated that after thorough and in-depth discussions among attending experts and scholars, a consensus has been reached on the judicial application of the crime of false invoicing: firstly, the parallel relationship between the crime of false invoicing and the crime of false value-added tax invoicing determines that the two crimes should have consistency in judicial application, that is, the crime of false invoicing also requires the purpose or result of causing national tax losses; Secondly, the act of issuing false invoices is highly complex and constitutes a criminal offense. It is necessary to limit its criminalization based on the specific circumstances of the case. The act of issuing false invoices for non-tax related purposes such as financing should not be treated as a criminal offense. Thirdly, the judicial loophole between the crime of issuing false invoices and the crime of issuing false value-added tax special invoices caused by the promulgation of the Judicial Interpretation should be reasonably resolved by limiting the application of the crime of issuing false invoices. Its core is to classify the act of issuing ordinary invoices that do not have the purpose or result of causing national tax losses as a crime and not treat it as such.
The seminar was vibrant and explored the subject matter with great depth. We are confident that it will exert a beneficial influence on enhancing the judicial handling of the offense of issuing false invoices. Following the event, the insights and perspectives of the experts and scholars will be meticulously compiled and presented to pertinent authorities, including the highest judicial bodies, to advance the pragmatic evolution of the legal framework surrounding false invoicing in China.