The connection between execution and reverse execution in tax cases
2025 07/21
Over the years, the author has found that tax authorities in different regions have completely different ways of handling when cases are transferred to judicial authorities. Some regions do not impose penalties on cases to be transferred temporarily and will wait for judicial results after transfer; But in some areas, after the punishment is imposed, it is transferred to the judicial authorities. So when is the most appropriate time to transfer? This article provides the following analysis of the issue for readers' reference.
1、 Tax authorities should transfer before imposing penalties
（1). The current law requires "timely" transfer, and transferring after punishment violates the principle of "timely"
Article 27, Paragraph 1 of the Administrative Penalty Law of the People's Republic of China (Revised in 2021) stipulates that "if an illegal act is suspected of being a crime, the administrative organ shall promptly transfer the case to the judicial organ and pursue criminal responsibility in accordance with the law. If there is no need to pursue criminal responsibility or exemption from criminal punishment according to the law, but administrative penalty should be imposed, the judicial organ shall promptly transfer the case to the relevant administrative organ." According to Article 3, Paragraph 1 of the "Provisions on the Transfer of Suspected Criminal Cases by Administrative Law Enforcement Organs" (Revised in 2020), In the process of investigating and punishing illegal acts in accordance with the law, if administrative law enforcement agencies discover that the illegal facts involve a certain amount of money, the circumstances of the illegal facts, and the consequences caused by the illegal facts, according to the provisions of the Criminal Law on crimes such as disrupting the socialist market economy order and obstructing social management order, as well as the judicial interpretations of the Supreme People's Court and the Supreme People's Procuratorate on crimes such as disrupting the socialist market economy order and disrupting social management order, and the prosecution standards of economic crime cases by the Supreme People's Procuratorate and the Ministry of Public Security, if it is suspected of constituting a crime and criminal responsibility needs to be pursued according to the law, it must be transferred to the public security organs in accordance with these regulations. "The above two provisions do not specify the time when the administrative agency transfers the case to the judicial organs, but clarify that tax administrative, If the standard for prosecution is met, it should be promptly transferred to the judicial authorities.
In addition, Article 1 of the "Opinions on Timely Transfer of Suspected Criminal Cases in Administrative Law Enforcement" (Gao Jian Hui [2006] No. 2) stipulates that "during the process of investigating and handling cases that meet the criminal prosecution standards and are suspected of committing crimes, administrative law enforcement agencies shall prepare a" Suspected Criminal Case Transfer Letter ", promptly transfer the case to the same level public security organs, and copy it to the same level people's procuratorate. For suspected criminal cases that have not been transferred in a timely manner and have already been subject to administrative penalties, administrative law enforcement agencies shall copy the" Administrative Penalty Decision Letter "to the same level public security organs and people's procuratorates within ten days of making administrative penalties, and inform relevant rights holders in writing. If the value of the involved goods or other circumstances of the case that clearly meet the criminal prosecution standards and are suspected of committing crimes seized on site, It should be immediately transferred to the public security organs for investigation and punishment Here we can see that if the tax authority confirms that the case meets the standards during the investigation, it should be promptly transferred. For tax cases, it is relatively easy for tax authorities to confirm whether the amount involved meets the criminal prosecution standard on the premise of a clear characterization of the case. Therefore, if the tax authorities believe that the case will involve transfer in the future but still impose punishment first, it will deviate from the provisions of Article 1 of the Supreme People's Procuratorate [2006] No. 2.
In fact, in the "Regulations on the Procedure for Handling Tax Inspection Cases", it is also emphasized that the inspection bureau does not necessarily make a decision to handle and punish before transferring. For example, Article 48 stipulates that "if a tax illegal act is suspected of being a crime, a suspected criminal case transfer letter shall be filled out, and after approval by the head of the tax bureau, it shall be transferred to the public security organs in accordance with the law, and the following materials shall be attached: (1) an investigation report on the suspected criminal case; (2) copies of the main evidence materials of the suspected crime; (3) other materials related to the suspected crime." The materials here emphasize the investigation report, not the decision to handle and punish. At the same time, in accordance with Article 47 (7) of the Regulations on the Procedures for Handling Tax Inspection Cases, the tax authorities shall transfer the case before punishment and wait for the conclusion of the criminal procedure before deciding whether to impose punishment.
In summary, tax authorities should not impose penalties for future cases involving transfer when investigating tax violations. Otherwise, it violates the provisions of the above-mentioned documents regarding "timely transfer" and does not comply with the handling procedures stipulated in the "Regulations on the Handling of Tax Inspection Cases".
(2). Transferring after punishment can easily lead to cross execution, waste judicial resources, and be detrimental to the protection of taxpayers' rights and interests
According to laws and regulations such as the Tax Collection and Administration Law, the Administrative Penalty Law, and the Tax Administrative Reconsideration Rules, after the tax authority serves the Tax Administrative Penalty Decision (along with the Tax Processing Decision) on the taxpayer, the taxpayer has the right to administrative reconsideration and administrative litigation. At this time, if the tax authority transfers the case to the judicial authority, how will it be handled?
If the principle of "criminal priority" is used to suspend administrative reconsideration or litigation, and if the future criminal classification is consistent with the tax administrative classification, then the administrative rights protection channel for taxpayers is basically meaningless. If during the period of public security acceptance or investigation, the administrative reconsideration procedure continues to advance, and if the case characterization (such as false opening or fraudulent export tax refund) is confirmed not to constitute, can the criminal procedure be directly terminated? At the same time, the particularity of tax cases lies in the fact that if they do not constitute administrative cases, they will not necessarily constitute criminal cases. So is it true that the principle of "criminal priority" does not apply to tax cases, and that criminal judicial proceedings should be conducted after tax administrative reconsideration and litigation procedures are completed?
In summary, if the tax authorities impose penalties first and then transfer the case to the judicial authorities, it will create many contradictions, waste judicial resources, and be detrimental to the protection of taxpayers' rights and interests.
2、 Transferring taxation to the judiciary does not necessarily constitute a criminal offense
Many taxpayers mistakenly believe that once a case is transferred from the tax authorities to the judicial authorities, they will inevitably face criminal responsibility in the future. The fact is obviously not the case. China's laws have made clear provisions for the reverse criminal linkage. After tax authorities transfer cases to judicial authorities, there may still be possibilities in the future, such as public security not filing a case, not prosecuting, and being exempted from criminal punishment. When such a situation arises, if the judicial authorities believe that taxpayers still need to bear administrative responsibility, they should transfer the case to the administrative authorities in accordance with the law. The specific regulations are as follows:
Article 27 of the Administrative Penalty Law of the People's Republic of China (revised in 2021) stipulates that "if an illegal act is suspected of a crime, the administrative organ shall promptly transfer the case to the judicial organ and pursue criminal responsibility in accordance with the law. If there is no need to pursue criminal responsibility or exemption from criminal punishment according to the law, but administrative punishment should be imposed, the judicial organ shall promptly transfer the case to the relevant administrative organ." Article 10 of the "Provisions on the Transfer of Suspected Criminal Cases by Administrative Law Enforcement Organs" (revised in 2020) stipulates that "administrative law enforcement organs shall handle cases that public security organs decide not to file according to law; among them, if administrative punishment should be imposed according to relevant laws, regulations or rules, administrative punishment shall be implemented in accordance with the law, If the public security organs find that there are no criminal facts after examination, or if the criminal facts are significantly minor after filing an investigation and do not need to pursue criminal responsibility, but administrative responsibility should be pursued according to law, they shall promptly transfer the case to the same level of administrative law enforcement organs, and the relevant administrative law enforcement organs shall handle it in accordance with the law. "At the same time, Article 21, Article 2 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Harm to Tax Collection and Administration (Interpretation [2024] No. 4) also stipulates that if the relevant acts implementing the provisions of this Interpretation are not prosecuted or exempted from criminal punishment, and administrative penalties, administrative sanctions or other sanctions need to be imposed, they shall be transferred to the relevant competent authorities for handling in accordance with the law. The relevant competent authorities shall promptly notify the People's Procuratorate and the People's Court of the results of the handling.
Of course, after the reverse connection between criminal and administrative measures, the tax authorities' inspection of taxpayers' involvement in the case does not necessarily result in tax treatment and punishment. Even if penalties are imposed, taxpayers still have remedies such as administrative hearings, reconsideration, and litigation procedures. It should be noted that the tax authorities should promptly notify the judicial authorities of the results of the case handling.
3、 Case study on the connection between criminal execution and execution in reverse
In a tax case published in January 2024, a comprehensive presentation of the process of execution connection and execution reverse connection discussed in the above two parts was presented to help readers understand the above analysis.
(1). Execution Connection - Tax Authorities Transfer Cases to Public Security before Punishment
The Hengshui Taxation Bureau of the State Administration of Taxation has determined that a building materials company in Hengshui obtained confirmed false value-added tax special invoices from Shenzhen * Technology Co., Ltd., Shenzhen * Industry Co., Ltd., and Shenzhen * Trade Co., Ltd. without any goods transactions and continued to issue them to downstream companies, which should be deemed as false issuance of goods. 1007 false value-added tax special invoices were issued, with a false amount of 97974794.86 yuan and a false tax amount of 16655715.50 yuan. The amount of false value-added tax special invoices reached the standard for filing and prosecution by public security organs, and was suspected of the crime of false issuance of value-added tax special invoices. According to the "Regulations on the Transfer of Suspected Criminal Cases by Administrative Law Enforcement Organs" (State Council Order No. 310 of the People's Republic of China), according to the State Council Order of the People's Republic of China, The provisions of Article 3 (Revised No. 730) shall be transferred to the public security organs.
It should be noted that at this time, the Hengshui Tax Bureau has not imposed any administrative penalties on the involved enterprises.
(2). Reverse execution linkage - Public security organs transfer cases to tax authorities
After analyzing and judging the case, the public security organs have made a decision to "pay attention to the boundary between general tax related illegal activities and tax related crimes with the purpose of defrauding national taxes. For enterprises with actual production and operation activities that falsely issue value-added tax special invoices for non tax fraud purposes such as inflating performance, financing, loans, etc. without causing tax losses, they will not be classified as the crime of falsely issuing value-added tax special invoices. Therefore, this case should be handled by the tax department and does not constitute a crime. If new criminal clues are found, they can be transferred to our bureau.
That is to say, after completing the analysis and judgment of this case, the public security organs believed that the behavior did not constitute a crime and therefore transferred it back to Hengshui Tax Bureau.
In the end, Hengshui Taxation Bureau imposed a fine of 500000 yuan on the enterprise for false issuance in accordance with Article 57 (1) of the Administrative Penalty Law of the People's Republic of China, Article 22 and Article 37 of the Invoice Management Measures of the People's Republic of China (note: the new law is Article 35).
4、 Summary
Based on the cases presented in the third section, we believe that if the tax authorities believe that there will be transfers involved in the investigation and handling of tax cases in the future, they should temporarily not impose penalties and wait for judicial confirmation before considering whether administrative penalties are necessary. In addition, in cases of false invoicing, Article 35 of the "Administrative Measures for Invoices of the People's Republic of China" stipulates penalties for the act of false invoicing (which progressively classifies the amount of fines and the degree of responsibility). If the tax authority has already imposed a fine on the taxpayer in accordance with this regulation, it represents that the tax authority considers the case to be limited to administrative violations and does not involve criminal offenses, and the case should not be transferred to the judicial authorities again (refer to Part III Cases).
1、 Tax authorities should transfer before imposing penalties
（1). The current law requires "timely" transfer, and transferring after punishment violates the principle of "timely"
Article 27, Paragraph 1 of the Administrative Penalty Law of the People's Republic of China (Revised in 2021) stipulates that "if an illegal act is suspected of being a crime, the administrative organ shall promptly transfer the case to the judicial organ and pursue criminal responsibility in accordance with the law. If there is no need to pursue criminal responsibility or exemption from criminal punishment according to the law, but administrative penalty should be imposed, the judicial organ shall promptly transfer the case to the relevant administrative organ." According to Article 3, Paragraph 1 of the "Provisions on the Transfer of Suspected Criminal Cases by Administrative Law Enforcement Organs" (Revised in 2020), In the process of investigating and punishing illegal acts in accordance with the law, if administrative law enforcement agencies discover that the illegal facts involve a certain amount of money, the circumstances of the illegal facts, and the consequences caused by the illegal facts, according to the provisions of the Criminal Law on crimes such as disrupting the socialist market economy order and obstructing social management order, as well as the judicial interpretations of the Supreme People's Court and the Supreme People's Procuratorate on crimes such as disrupting the socialist market economy order and disrupting social management order, and the prosecution standards of economic crime cases by the Supreme People's Procuratorate and the Ministry of Public Security, if it is suspected of constituting a crime and criminal responsibility needs to be pursued according to the law, it must be transferred to the public security organs in accordance with these regulations. "The above two provisions do not specify the time when the administrative agency transfers the case to the judicial organs, but clarify that tax administrative, If the standard for prosecution is met, it should be promptly transferred to the judicial authorities.
In addition, Article 1 of the "Opinions on Timely Transfer of Suspected Criminal Cases in Administrative Law Enforcement" (Gao Jian Hui [2006] No. 2) stipulates that "during the process of investigating and handling cases that meet the criminal prosecution standards and are suspected of committing crimes, administrative law enforcement agencies shall prepare a" Suspected Criminal Case Transfer Letter ", promptly transfer the case to the same level public security organs, and copy it to the same level people's procuratorate. For suspected criminal cases that have not been transferred in a timely manner and have already been subject to administrative penalties, administrative law enforcement agencies shall copy the" Administrative Penalty Decision Letter "to the same level public security organs and people's procuratorates within ten days of making administrative penalties, and inform relevant rights holders in writing. If the value of the involved goods or other circumstances of the case that clearly meet the criminal prosecution standards and are suspected of committing crimes seized on site, It should be immediately transferred to the public security organs for investigation and punishment Here we can see that if the tax authority confirms that the case meets the standards during the investigation, it should be promptly transferred. For tax cases, it is relatively easy for tax authorities to confirm whether the amount involved meets the criminal prosecution standard on the premise of a clear characterization of the case. Therefore, if the tax authorities believe that the case will involve transfer in the future but still impose punishment first, it will deviate from the provisions of Article 1 of the Supreme People's Procuratorate [2006] No. 2.
In fact, in the "Regulations on the Procedure for Handling Tax Inspection Cases", it is also emphasized that the inspection bureau does not necessarily make a decision to handle and punish before transferring. For example, Article 48 stipulates that "if a tax illegal act is suspected of being a crime, a suspected criminal case transfer letter shall be filled out, and after approval by the head of the tax bureau, it shall be transferred to the public security organs in accordance with the law, and the following materials shall be attached: (1) an investigation report on the suspected criminal case; (2) copies of the main evidence materials of the suspected crime; (3) other materials related to the suspected crime." The materials here emphasize the investigation report, not the decision to handle and punish. At the same time, in accordance with Article 47 (7) of the Regulations on the Procedures for Handling Tax Inspection Cases, the tax authorities shall transfer the case before punishment and wait for the conclusion of the criminal procedure before deciding whether to impose punishment.
In summary, tax authorities should not impose penalties for future cases involving transfer when investigating tax violations. Otherwise, it violates the provisions of the above-mentioned documents regarding "timely transfer" and does not comply with the handling procedures stipulated in the "Regulations on the Handling of Tax Inspection Cases".
(2). Transferring after punishment can easily lead to cross execution, waste judicial resources, and be detrimental to the protection of taxpayers' rights and interests
According to laws and regulations such as the Tax Collection and Administration Law, the Administrative Penalty Law, and the Tax Administrative Reconsideration Rules, after the tax authority serves the Tax Administrative Penalty Decision (along with the Tax Processing Decision) on the taxpayer, the taxpayer has the right to administrative reconsideration and administrative litigation. At this time, if the tax authority transfers the case to the judicial authority, how will it be handled?
If the principle of "criminal priority" is used to suspend administrative reconsideration or litigation, and if the future criminal classification is consistent with the tax administrative classification, then the administrative rights protection channel for taxpayers is basically meaningless. If during the period of public security acceptance or investigation, the administrative reconsideration procedure continues to advance, and if the case characterization (such as false opening or fraudulent export tax refund) is confirmed not to constitute, can the criminal procedure be directly terminated? At the same time, the particularity of tax cases lies in the fact that if they do not constitute administrative cases, they will not necessarily constitute criminal cases. So is it true that the principle of "criminal priority" does not apply to tax cases, and that criminal judicial proceedings should be conducted after tax administrative reconsideration and litigation procedures are completed?
In summary, if the tax authorities impose penalties first and then transfer the case to the judicial authorities, it will create many contradictions, waste judicial resources, and be detrimental to the protection of taxpayers' rights and interests.
2、 Transferring taxation to the judiciary does not necessarily constitute a criminal offense
Many taxpayers mistakenly believe that once a case is transferred from the tax authorities to the judicial authorities, they will inevitably face criminal responsibility in the future. The fact is obviously not the case. China's laws have made clear provisions for the reverse criminal linkage. After tax authorities transfer cases to judicial authorities, there may still be possibilities in the future, such as public security not filing a case, not prosecuting, and being exempted from criminal punishment. When such a situation arises, if the judicial authorities believe that taxpayers still need to bear administrative responsibility, they should transfer the case to the administrative authorities in accordance with the law. The specific regulations are as follows:
Article 27 of the Administrative Penalty Law of the People's Republic of China (revised in 2021) stipulates that "if an illegal act is suspected of a crime, the administrative organ shall promptly transfer the case to the judicial organ and pursue criminal responsibility in accordance with the law. If there is no need to pursue criminal responsibility or exemption from criminal punishment according to the law, but administrative punishment should be imposed, the judicial organ shall promptly transfer the case to the relevant administrative organ." Article 10 of the "Provisions on the Transfer of Suspected Criminal Cases by Administrative Law Enforcement Organs" (revised in 2020) stipulates that "administrative law enforcement organs shall handle cases that public security organs decide not to file according to law; among them, if administrative punishment should be imposed according to relevant laws, regulations or rules, administrative punishment shall be implemented in accordance with the law, If the public security organs find that there are no criminal facts after examination, or if the criminal facts are significantly minor after filing an investigation and do not need to pursue criminal responsibility, but administrative responsibility should be pursued according to law, they shall promptly transfer the case to the same level of administrative law enforcement organs, and the relevant administrative law enforcement organs shall handle it in accordance with the law. "At the same time, Article 21, Article 2 of the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Harm to Tax Collection and Administration (Interpretation [2024] No. 4) also stipulates that if the relevant acts implementing the provisions of this Interpretation are not prosecuted or exempted from criminal punishment, and administrative penalties, administrative sanctions or other sanctions need to be imposed, they shall be transferred to the relevant competent authorities for handling in accordance with the law. The relevant competent authorities shall promptly notify the People's Procuratorate and the People's Court of the results of the handling.
Of course, after the reverse connection between criminal and administrative measures, the tax authorities' inspection of taxpayers' involvement in the case does not necessarily result in tax treatment and punishment. Even if penalties are imposed, taxpayers still have remedies such as administrative hearings, reconsideration, and litigation procedures. It should be noted that the tax authorities should promptly notify the judicial authorities of the results of the case handling.
3、 Case study on the connection between criminal execution and execution in reverse
In a tax case published in January 2024, a comprehensive presentation of the process of execution connection and execution reverse connection discussed in the above two parts was presented to help readers understand the above analysis.
(1). Execution Connection - Tax Authorities Transfer Cases to Public Security before Punishment
The Hengshui Taxation Bureau of the State Administration of Taxation has determined that a building materials company in Hengshui obtained confirmed false value-added tax special invoices from Shenzhen * Technology Co., Ltd., Shenzhen * Industry Co., Ltd., and Shenzhen * Trade Co., Ltd. without any goods transactions and continued to issue them to downstream companies, which should be deemed as false issuance of goods. 1007 false value-added tax special invoices were issued, with a false amount of 97974794.86 yuan and a false tax amount of 16655715.50 yuan. The amount of false value-added tax special invoices reached the standard for filing and prosecution by public security organs, and was suspected of the crime of false issuance of value-added tax special invoices. According to the "Regulations on the Transfer of Suspected Criminal Cases by Administrative Law Enforcement Organs" (State Council Order No. 310 of the People's Republic of China), according to the State Council Order of the People's Republic of China, The provisions of Article 3 (Revised No. 730) shall be transferred to the public security organs.
It should be noted that at this time, the Hengshui Tax Bureau has not imposed any administrative penalties on the involved enterprises.
(2). Reverse execution linkage - Public security organs transfer cases to tax authorities
After analyzing and judging the case, the public security organs have made a decision to "pay attention to the boundary between general tax related illegal activities and tax related crimes with the purpose of defrauding national taxes. For enterprises with actual production and operation activities that falsely issue value-added tax special invoices for non tax fraud purposes such as inflating performance, financing, loans, etc. without causing tax losses, they will not be classified as the crime of falsely issuing value-added tax special invoices. Therefore, this case should be handled by the tax department and does not constitute a crime. If new criminal clues are found, they can be transferred to our bureau.
That is to say, after completing the analysis and judgment of this case, the public security organs believed that the behavior did not constitute a crime and therefore transferred it back to Hengshui Tax Bureau.
In the end, Hengshui Taxation Bureau imposed a fine of 500000 yuan on the enterprise for false issuance in accordance with Article 57 (1) of the Administrative Penalty Law of the People's Republic of China, Article 22 and Article 37 of the Invoice Management Measures of the People's Republic of China (note: the new law is Article 35).
4、 Summary
Based on the cases presented in the third section, we believe that if the tax authorities believe that there will be transfers involved in the investigation and handling of tax cases in the future, they should temporarily not impose penalties and wait for judicial confirmation before considering whether administrative penalties are necessary. In addition, in cases of false invoicing, Article 35 of the "Administrative Measures for Invoices of the People's Republic of China" stipulates penalties for the act of false invoicing (which progressively classifies the amount of fines and the degree of responsibility). If the tax authority has already imposed a fine on the taxpayer in accordance with this regulation, it represents that the tax authority considers the case to be limited to administrative violations and does not involve criminal offenses, and the case should not be transferred to the judicial authorities again (refer to Part III Cases).
