How to define false invoicing?
One of the following acts belongs to "falsely issuing special VAT invoices":
(1) Issuing special VAT invoices for others, not buying or selling goods or providing or accepting taxable services for himself, others or introducing others;
(2) Issuing special VAT invoices with false quantity or amount for others, for oneself or for others when buying or selling goods or providing or accepting taxable services;
(3) Carry out actual business activities, but let others issue special VAT invoices for themselves.
What is bona fide acquisition of false VAT invoices?
Obtaining a fake invoice in good faith means that the payer (drawee) has a real transaction with the seller or service provider, and the payer does not know that the obtained invoice is fake. Subjectively, the payer has no intention to evade taxes, defraud export tax rebates or seek illegal benefits, but subjectively, it is unintentional.
According to the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on the Handling of Taxpayers Obtaining False Special VAT Invoices in Good Faith (Guo Shui Fa [2000] 187No.), the following four conditions need to be met at the same time to be considered as "good faith", and the payer (drawee) shall not be punished for tax evasion or fraudulent export tax refund:
(1) There is a real transaction between the buyer and the seller;
(2) The seller uses the special invoices of the provinces (autonomous regions, municipalities directly under the Central Government and cities under separate state planning) where it is located;
(3) The name, seal, quantity, amount and tax amount of the seller indicated in the special invoice are consistent with the actual situation;
(4) There is no evidence to prove that the buyer knew that the special invoice provided by the seller was obtained by illegal means.
Handling of obtaining false VAT invoices in good faith
1. If the legitimate and valid invoice can be obtained from the seller again, the input tax or export tax rebate can be deducted;
2. If it is impossible to re-obtain legal and valid invoices, deduct the input tax amount or apply for export tax rebate, the payer shall recover the deducted input tax amount or the obtained export tax rebate according to law. The recovery of the withheld tax does not belong to the case that the taxpayer fails to pay the tax within the prescribed time limit, and there is no need to add a late fee.