Tax Authorities in China Crack Down on Tax Evasion and Fraud in New Energy, Biotechnology, and High-Tech Industries

Strategic Insights -

Tax authorities in China have investigated and dealt with two cases of tax evasion and fraud in the new energy, biotechnology, and high-tech industries. The first case involved Jiangxi Nan's Lithium Battery New Material Co., Ltd., which was fined 5.719 million yuan and ordered to pay back taxes after inflating R&D expenses to enjoy tax and fee preferential treatments. The second case involved a criminal gang led by Lin Jiayang, which falsely issued invoices to defraud export tax rebates worth 149 million yuan, resulting in prison sentences and fines for the gang members.

Key Takeaways:

  • Two cases of tax evasion and fraud were investigated by Chinese tax authorities in the new energy, biotechnology, and high-tech industries.
  • The first case involved Jiangxi Nan's Lithium Battery New Material Co., Ltd., which was fined 5.719 million yuan and ordered to pay back taxes for inflating R&D expenses.
  • The second case involved a criminal gang led by Lin Jiayang, which falsely issued invoices to defraud export tax rebates worth 149 million yuan, resulting in prison sentences and fines for the gang members.
  • The tax authorities will continue to promote the rule of law in tax administration, strictly investigating and punishing illegal acts that undermine market order at the expense of tax fairness.
  • The benefits of tax preferential policies will flow to enterprises that truly focus on technological innovation and quality improvement, while maintaining a fair tax environment based on the rule of law.
  • The tax authorities will resolutely prevent the externalization of tax costs and resist low-price, disorderly "involutionary" competition, promoting the orderly withdrawal of outdated production capacity.

Statistics:

  • 5.719 million yuan: fine imposed on Jiangxi Nan's Lithium Battery New Material Co., Ltd. for inflating R&D expenses.
  • 149 million yuan: amount of export tax rebates defrauded by the gang led by Lin Jiayang.
  • 12 years and 6 months: prison sentence imposed on Lin Jiayang for the crime of defrauding export tax rebates.
  • 70 million yuan: fine imposed on Lin Jiayang for the crime of defrauding export tax rebates.
  • 18 people: sentenced to fixed-term imprisonment ranging from 3 to 11 years and 6 months for various crimes related to export tax evasion and fake value-added tax invoices.

Sources:

  • State Administration of Taxation of the People's Republic of China, August 18
  • People's Court of Shenzhen Intermediate People's Court, April 2025