Part One: Ten Taxation Risks

I. Risk of Off-Balance Sheet Fund Inflow

What is off-balance sheet fund inflow? In simple terms, it refers to the practice of keeping "two sets of books." For example, a furniture business owner sells furniture worth 10 million yuan, but the customers do not request invoices. Consequently, the owner deposits this money into a personal account. Later, when the company needs to purchase inventory and lacks funds, the owner transfers the 10 million yuan back to the company from the personal account. This behavior can easily be identified by tax authorities as "off-balance sheet fund inflow," suggesting that the company is hiding its true income through off-balance sheet funds. If inspected, the company will face the risk of "tax arrears + penalties + late fees."

The essence of fund inflow is an anomaly in the financial statement cash flow. Typically, fund inflow occurs because the company's internal funds are insufficient, necessitating the transfer of off-balance sheet funds back into the company. The returned funds are recorded under the "other payables" tax item, which is equivalent to the company owing money to the owner. If the company's financial statements show a large amount under "other payables," it is likely to be identified by the tax authorities as keeping "two sets of books," leading to the risk of penalties.

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How to mitigate this risk? Companies can resolve this risk through five methods: direct repayment, offsetting receivables (i.e., offsetting a person's receivables against their other payables), bridge processing, debt-to-equity conversion (transforming other payables on the company's books into equity ownership), and value-added debt repayment.

II. Company Liquidation Risk

Some businesses, aware of unclear accounting, unclear sources of funds, or involvement in tax evasion, may wish to "disappear" by liquidating the company. However, it is important to understand that company liquidation generally involves the tax authority reviewing the company's tax affairs for the past 3-4 years through an audit and inspection, during which all non-compliant tax behaviors will be exposed. Therefore, companies should consider this risk before liquidation. If liquidation is necessary, it is advisable to correct and resolve non-compliant issues before liquidation to avoid greater risks.

III. Fiscal Subsidy Tax Risk

(The rest of the text is not provided, so the translation cannot be completed.)Financial subsidies, as a means of economic regulation, can effectively incentivize the production and business activities of enterprises. However, there are risks in the tax treatment of financial subsidy income that need to be noted. The biggest risk is that, to avoid paying taxes, some enterprises deliberately recognize all financial subsidy income as non-taxable income. Unbeknownst to them, according to the provisions of the Corporate Income Tax Law and its implementation regulations, financial subsidy income can be considered as non-taxable income only if three conditions are met simultaneously: First, the enterprise can provide a document specifying the special purpose of the allocated funds; second, the financial department or other government departments allocating the funds have special fund management methods or specific management requirements; third, the enterprise keeps separate accounting for the funds and the expenditures incurred from these funds. Only when an enterprise meets all three conditions is it eligible to include government subsidy income as non-taxable income, and deduct it from the total income when calculating the taxable income. Otherwise, it is not allowed. Acting rashly would violate legal provisions.

Additionally, some enterprises use financial subsidy income for expenditures and directly deduct them before tax. It should be noted that Article 28 of the Implementation Regulations of the Corporate Income Tax Law clearly states: First, the expenses formed by the use of non-taxable income for expenditures shall not be deducted when calculating the taxable income; second, the depreciation and amortization of assets formed by the use of non-taxable income for expenditures shall not be deducted when calculating the taxable income. Therefore, if an enterprise has deducted expenses formed by the use of financial subsidy income for expenditures, it needs to timely adjust the deducted expenses for tax payment during the annual settlement and payment.

IV. Personal Partnership Enterprise Individual Income Tax Risks

If the nature of the enterprise is a personal partnership, it is not required to pay corporate income tax. Taxpayers of corporate income tax must have legal person status, while personal partnership enterprises are not legal entities and do not bear external responsibilities in the name of the enterprise, so they do not need to pay corporate income tax.

However, personal partnership enterprises are subject to individual income tax. The net amount of the income of a personal partnership enterprise, after deducting costs, expenses, and losses, should be considered as income from production and business operations. It should be taxed as an individual business operator's income from production and business operations. If neglected and not paid, it may be subject to a penalty of more than 50% but not more than 5 times the underpaid tax; if a crime is constituted, corresponding criminal responsibility shall be pursued according to law.

V. Taxation Risks for Listed Companies

The management structure of listed companies is complex, and their equity structure is also intricate. The main tax risks involved include: First, the remuneration paid to independent directors who do not hold positions in the company is not calculated and paid according to the "remuneration for services" income regulations for individual income tax. Second, when natural person investors undergo equity change transactions that result in an increase in value, they fail to declare and pay individual income tax before the equity change at the Market Supervision Administration. Third, the separate taxation method for annual one-time bonuses is used multiple times within a tax year. Fourth, individual income tax deductions that should be enjoyed are not enjoyed, or those that should not be enjoyed are enjoyed, or the deduction information filled in is not true, etc.

VI. Tax Risks Involving Employee Benefits

Enterprises also face tax risks when distributing salaries to employees, terminating labor relations, etc. For example, when enterprises distribute various subsidies, bonuses, goods, shopping cards, gifts, etc., to employees, they fail to convert the value into wages and salaries and deduct the standard deduction according to tax law regulations after deducting expenses, and then withhold individual income tax according to the "wages and salaries income" taxable item. Again, when enterprises pay remuneration for services, they fail to withhold and pay individual income tax for remuneration for services, royalties, and franchise fees as stipulated. For example, when enterprises terminate labor relations and pay a one-time compensation to individuals, the part exceeding three times the average wage of local employees in the previous year is not withheld and paid as wages and salaries income. Finally, the part of the pension insurance, medical insurance, unemployment insurance, and housing provident fund paid by enterprises for employees exceeding the allowable standard is not withheld for individual income tax, etc. These risks involving the immediate interests of employees should not only be noted by corporate finance personnel, but also by employees themselves as defenders of their own interests. They should learn to actively safeguard their legitimate rights and interests to avoid losses.Seven, Risk of Unreceipted Expenditure

Unreceipted expenditure refers to the situation where a company makes payments for purchases without obtaining invoices. This is commonly seen in the acquisition of agricultural products and the recycling of scrap materials, where the sellers are often farmers and obtaining invoices is not very convenient, leading to unreceipted expenditures.

Unreceipted expenditures can easily pose risks to a company. This is because, without invoices, they cannot be considered as cost expenditures. That is, the purchasing party cannot effectively deduct the input tax of value-added tax, nor can they effectively deduct from the taxable income when calculating the corporate income tax payable. The absence of cost expenditures can lead to inflated profits and income tax, resulting in overpayment of income tax. To avoid overpaying taxes, some companies may resort to cooking the books and purchasing invoices to make up for the shortfall, which can lead to tax evasion and further amplify this risk. Ultimately, this may result in punishment from the tax authorities.

Eight, Risk of Recording Non-compliant Invoices

Generally speaking, invoices that are privately printed, forged, altered, voided, falsely issued, and improperly filled out are all considered non-compliant and are not allowed for pre-tax deductions. At present, with the increased enforcement of tax laws in China, the number of non-compliant invoices resulting from private printing and other such practices has been greatly reduced. The non-compliant invoices that currently exist are mainly due to careless filling and issuance, as well as inaccurate invoice information.

For example, a general invoice issued without filling in the taxpayer identification number or the unified social credit code of the purchaser; the filled content does not match the actual transaction; the invoice type does not match the company's business scope, and the header is non-compliant; using old version invoices printed by the original provincial tax authorities; renting immovable property without noting the required information in the remarks column; the invoice does not include the full name of the payer; and the issuance of single-purpose card sales, recharge, and use, etc., are not standardized, all these actions can result in non-compliant invoices. Companies should pay close attention to these issues to avoid the aforementioned problems when issuing invoices to prevent non-compliance, which could affect subsequent accounting.

Nine, Risk of Internal Shareholder Loans

Internal loans refer to loans from shareholders to the company. Loans from shareholders to the company may potentially be suspected of capital flight or "deemed dividends," thereby bringing regulatory risks to the company. If shareholder loans are not repaid within a tax year, it can also easily lead to the company overpaying taxes.

Ten, Risk of Bank Account Opening

The risk of opening bank accounts refers to the potential issues that may arise when a company opens a bank account.Some businesses believe that opening a bank account is a purely personal act of the enterprise, and they can act without restraint and without supervision. However, this is not the case. According to the "Implementation Rules of the Tax Collection and Administration Law of the People's Republic of China" (State Council Order No. 362), taxpayers engaged in production and business operations should report all their account numbers to the competent tax authorities in writing within 15 days from the date of opening a basic deposit account or other deposit accounts; if there is any change, they should report to the competent tax authorities in writing within 15 days from the date of change. Therefore, enterprises should report to the tax authorities in a timely manner after opening a bank account to avoid penalties.

Moreover, some enterprises open multiple accounts in banks because of impure motives. Some enterprises open multiple deposit accounts in banks for fund transfers to conceal sales revenue, unaware that this is a serious illegal act. Once discovered by the tax authorities, it may be identified as tax evasion and subject to legal punishment.

Part II: Tax Risk Response

1. Preemptive Prevention - Compliance Management and Risk Control

(1) Establishing Tax Risk Awareness

Many enterprises have some cognitive errors regarding tax risks, thinking that as long as they are not subject to tax inspections and supplementary tax payments, and are not involved in tax-related criminal offenses, there are no tax risks. As a result, these enterprises often only focus on whether there is an underpayment of taxes, without paying attention to the substantial operational losses brought to the enterprise by overpayment of taxes, and have not paid attention to the potential tax risks in the daily operations of the enterprise. However, enterprises should deeply understand that the key to tax risk management lies in prevention and control, not remediation. Tax risks are not only about supplementary tax payments and fines for enterprises, but also affect the actual income, credit indicators, qualification assessments, listing financing, and other aspects of the enterprise, which are related to whether the enterprise can develop healthily and sustainably.

To establish tax risk awareness, enterprises should first strengthen tax law training and improve professional quality. Tax policies are numerous and updated quickly, which puts higher demands on the level of enterprise tax management personnel. Enterprises can organize regular professional training and invite tax professionals for tax payment guidance. Secondly, enterprises should integrate tax risk awareness into the strategic layout of enterprise development and business model design. Before decision-making in investment, financing, and business operations, accurately identify and assess the level of tax burden and tax risks, and consider tax risks as an important factor, aiming to minimize tax burden and maximize value, thus making the best business model and transaction structure arrangements.

(2) Establishing a Tax Compliance Management System

Tax risks lurk in the process of enterprise operations. To effectively prevent and control enterprise tax risks, it is necessary to establish a comprehensive tax compliance management system, and improve various tax management systems, business standards, and business norms. First, the internal tax management organizational structure of the enterprise should be clarified, and the tax responsibilities of each business department should be divided. Secondly, for the daily business activities of the enterprise, feasible internal control regulations for tax risks should be formulated, and the prevention and control of tax risks should be considered as an important part of enterprise operations. At the same time, targeted tax management measures should be formulated for major external investments, major mergers and acquisitions, and reorganizations of the enterprise, changes in business models, and the signing of important contracts or agreements. Furthermore, it is necessary to refine the processes and divide responsibilities for tax administrative matters such as tax accounting, tax declaration and payment, and tax archives.

In addition, enterprises can also establish a regular self-inspection system, conduct self-inspections on common tax issues such as enterprise tax registration, tax declaration, tax payment, invoice usage, and other tax inspections and audits, review the internal tax compliance and tax burden costs of the enterprise, and promptly discover and resolve tax loopholes to avoid supplementary tax payments, late fees, and fines.2. During-the-Event Response - Effective Response and Highlighting Key Points

The most common and primary way in which tax risks can adversely affect businesses is through tax administration, with tax inspections being the most typical example. Effectively dealing with tax inspections is an important task in mitigating tax risks and preventing the expansion of losses.

Tax inspections are a crucial part of tax collection and administration. They are conducted by tax authorities based on national tax laws and administrative regulations to oversee the fulfillment of tax payment and withholding obligations by taxpayers and withholding agents, including tax audits. Common reasons for tax inspections include non-standard invoice management, being reported, obtaining abnormal deduction vouchers, abnormal financial indicators, tax collaboration, and incorrect application of tax policies.

When facing a tax inspection, first and foremost, businesses should promptly provide materials and actively cooperate with inquiries, proactively understanding the inspection procedures to maximize the protection of their interests. Do not attempt to conceal or destroy accounting records, business materials, or other tax-related materials, nor refuse to allow inspection personnel to investigate and gather evidence on tax-related materials. Secondly, businesses should strengthen communication with the tax inspection department, provide feedback on issues identified in the previous stage, explain and clarify newly discovered issues in the current stage, understand the next inspection plan of the tax inspection department, and prepare and cooperate purposefully while there is still an opportunity for negotiation to avoid the tax bureau making adverse written conclusions. Additionally, businesses should back up documents and preserve evidence during the inspection process, facilitating the complete reconstruction of the inspection process by themselves or a third party at a later date, and making judgments on the legality and rationality of the inspection conclusions.

3. Post-Event Remedies - Comparative Selection and Reasonable Estimation

The correct and effective exercise of remedial rights can maximize the protection of a company's legal rights and interests when there are certain issues in tax law enforcement, and minimize the impact of tax risks. The usual remedies are administrative reconsideration and administrative litigation.

Administrative reconsideration applies to cases involving decisive documents and specific administrative actions during the inspection process. If taxpayers believe that the specific administrative actions of the tax bureau infringe upon their legal rights and interests, they can initiate administrative reconsideration. Administrative reconsideration is an internal supervision and error-correction mechanism established in the form of law within administrative organs, and it should be the preferred method for resolving administrative disputes for the public, especially in cases related to tax collection actions. Administrative litigation applies to "pre-litigation reconsideration" cases that have gone through the reconsideration process and to cases where administrative penalties, enforcement measures, or tax preservation measures can be directly litigated. It is the "ultimate weapon" for resolving tax disputes and protecting the legal rights and interests of taxpayers.

Part III Common Tax Risk Points for Various Taxes (General Taxpayers)

I. Value-Added Tax (VAT)1. There is mixed sales or concurrent business operations, but they are not effectively distinguished, or mixed sales are artificially treated as concurrent operations.

2. The scope of production and business involves multiple tax rates, with high-rate business projects being reported using a low tax rate.

3. There are businesses applicable to the simplified tax calculation method, as well as those applicable to the general tax calculation method, but they are not accounted for separately, leading to a confusing tax calculation method.

4. There is a significant discrepancy between the value declared for value-added tax (VAT) and the income declared for corporate income tax.

5. Development products are used for donations, sponsorships, employee benefits, collective welfare, rewards, distribution to shareholders or as investment in shares, auctions, or in exchange for non-monetary assets from other units and individuals, without being treated as sales for tax reporting purposes.

6. The amount of invoices issued is greater than the declared amount.

7. The input tax amount transferred out in the "VAT and Additional Tax Declaration Form (for VAT general taxpayers)" is negative, or the input tax deduction rate for general taxpayers is abnormal.

8. The "VAT and Additional Tax Declaration Form (for VAT general taxpayers)" reports a negative number for sales without invoices and without a justifiable reason.

9. The "VAT and Additional Tax Declaration Form (for VAT general taxpayers)" reports data in the installment prepayment tax column that exceeds the actual prepayment amount; the data reported in the tax reduction column does not match the actual amount.

10. Invoices are issued without any business transactions taking place, or the invoices issued do not correspond to the actual business transactions.11. The Customs import VAT special payment documents and the deductible input tax amount for agricultural products reported in the current period do not match the actual business operations.

12. The tax income amount for corporate income tax and VAT withheld and paid on behalf of the taxpayer does not match.

13. There has been a change in the content of the export tax refund (exemption) filing, but the export tax refund (exemption) filing has not been changed accordingly.

14. Within 15 days after the export enterprise declares the export tax refund (exemption) business, the document filing has not been carried out as stipulated.

15. After the export enterprise declares the export tax refund (exemption), the remittance has not been received before the deadline of the declaration period of the following year.

16. The tax basis declared by the foreign trade export enterprise for the refund (exemption) of tax does not match the amount indicated on the VAT special payment document for imported goods, the tax-paid price indicated on the Customs import VAT special payment document, or the amount indicated on the tax payment certificate.

17. The tax basis declared by the production-type export enterprise for the exemption and refund of tax does not match the FOB amount on the export invoice (except for the goods re-exported after processing with imported materials).

II. Corporate Income Tax

18. The expenses for employee welfare, employee education funds, and trade union funds do not comply with the tax law's stipulated payment objects, scope, confirmation principles, and expense limits, etc., and have not been increased in the taxable income. They have been accrued but not actually occurred, or the actual expenses for employee welfare, trade union funds, and employee education funds exceed the expense limits without tax adjustment.

19. When correcting the declaration of VAT for previous years, the corresponding corporate income tax declaration for that year has not been adjusted.20. Misreporting the total amount of assets and the number of employees leads to not enjoying the preferential tax policies for small and micro-profit enterprises when eligible, or enjoying them when not eligible.

21. During the declaration, the incorrect selection of whether it is a state-prohibited industry or a high-tech enterprise leads to not enjoying the preferential tax policies when eligible, or enjoying them when not eligible.

22. The basic social insurance premiums and housing provident funds paid for employees, such as basic pension insurance, basic medical insurance, unemployment insurance, work injury insurance, and maternity insurance, are not deducted before tax within the specified scope and standards, and the excess is not added to the taxable income.

23. The additional deduction exceeds the prescribed standards and scope.

24. The amount of income declared for corporate income tax prepayment and final settlement is significantly lower than the income declared for value-added tax during the same period.

25. The taxpayer has not declared and paid taxes as if the development products were sold when they are used for donations, sponsorships, employee benefits, rewards, distribution to shareholders or investment in shares, auctions, or exchanged for non-monetary assets from other units and individuals.

26. Expenditures on fines and confiscations, sponsorships, and other non-deductible items have been deducted before tax.

27. Donation expenditures do not meet the conditions for public welfare donation expenditures stipulated by tax law, or the part exceeding 12% of the annual profit total (unless otherwise stipulated by the State Council's financial and tax authorities) has not been adjusted for tax purposes.

28. The expenditure on qualified advertising and business promotion costs incurred in the current year exceeds 15% of the current year's sales (business) income (unless otherwise stipulated by the State Council's financial and tax authorities), and the excess part has not been adjusted to increase the taxable income for the current year.

29. The expenditure on business entertainment related to production and business activities has not been declared according to the pre-tax deduction standard (not exceeding 60% of the amount incurred and not exceeding 0.5% of the current year's sales business income), and the excess part has not been adjusted to increase the taxable income.30. Costs and expenses unrelated to production and operation, such as costs of affiliated enterprises, personal expenses of investors or employees, retirement benefits, and external guarantee fees, as well as various types of advance payments and deductions (withholding and remittance of personal income tax, advance payment of transportation costs on behalf of processing, etc.), have been deducted before tax without tax adjustments.

III. Personal Income Tax

31. Remuneration paid to independent directors who are not employed by the company has not been calculated and paid according to the provisions for "remuneration for services" income.

32. In the case of equity change transactions by natural person investors resulting in an increase in value, personal income tax has not been declared and paid before the investor change is registered with the Market Supervision Administration.

33. Special additional deductions for personal income tax that should be enjoyed have not been enjoyed, or have been enjoyed when they should not have been, or the deduction information provided is not true.

34. Personal income tax has not been withheld and remitted as required for payments of remuneration for services, manuscript fees, and royalties.

35. The separate taxation method for one-time annual bonuses has been used multiple times within a single tax year.

36. Income obtained from multiple sources by an individual has not been consolidated for personal income tax payment.

37. The part of the one-time compensation paid by an enterprise to an individual for the termination of labor relations that exceeds three times the average wage of employees of the previous year has not been withheld and remitted as income from wages and salaries.38. Various subsidies, bonuses, goods, shopping cards, gifts, etc., distributed to employees, if not converted into monetary value as wages and salaries and deducted from the standard deduction as stipulated by tax laws, shall be subject to personal income tax withholding on the taxable item of "wages and salaries income."

39. The portion of pension insurance, medical insurance, unemployment insurance, and housing provident fund contributions made by enterprises for employees that exceed the allowable standards has not been subject to personal income tax withholding.

IV. Property Tax

40. The consideration obtained by taxpayers for immovable ancillary equipment and supporting facilities attached to the building has not been included in the original value of the property as required for the declaration and payment of property tax.

41. Income from housing rentals has not been declared, not declared on time, or not declared truthfully.

42. Tax-exempt units have not declared and paid taxes when using their own properties for non-exempt purposes (such as renting out).

43. In cases where the tax obligation for property tax is legally terminated due to changes in the physical or legal status of the property, the taxpayer has not reported and updated the tax source information in a timely manner.

44. When a business has both taxable and tax-exempt properties, the boundary between taxable and exempt is not clearly defined, leading to incorrect declarations and payments of taxes.

45. Those who are entitled to enjoy the preferential reduction or exemption of property tax due to financial difficulties have not gone through the prescribed procedures for tax reduction or exemption approval and have calculated and paid less tax on their own.

46. Failure to report information on cross-district property tax sources, resulting in the underpayment of property tax.V. Land Value-Added Tax

47. Failure to settle and pay the land value-added tax according to the relevant taxable items before applying for cancellation.

48. Failure to separately declare and prepay the land value-added tax for real estate types and pre-collection rates during the presale of real estate.

49. When development products are used for employee welfare, rewards, external investments, distribution to shareholders or investors, offsetting debts, or exchanging for non-monetary assets from other units and individuals, resulting in the transfer of ownership, failure to report and pay the land value-added tax as if it were a sale.

50. During the prepayment process, there is value-added tax but no prepayment of land value-added tax.

51. The tax basis for prepayment of value-added tax and land value-added tax does not match.

52. Failure to conduct a settlement when the conditions for settlement or possible settlement are met.

53. Real estate development enterprises have not declared and paid the land value-added tax when using their constructed commercial housing for investment and joint ventures.

54. When transferring the right to use state-owned land, buildings, and attached objects, failure to calculate and pay the land value-added tax for land transferred without a land use right certificate.

55. When transferring land ownership, if the transfer price is significantly low without a justifiable reason, underreporting and underpaying the land value-added tax.VI. Deed Tax

56. When land use rights are obtained through allocation and then transferred, the corresponding deed tax has not been paid for the additional land transfer payment and other transfer fees.

57. When state-allocated land is changed from its original nature to transferable land, the corresponding deed tax has not been paid based on the additional land transfer payment.

58. During the transfer of real estate and land rights, the transfer price is significantly low without a justifiable reason, leading to underreporting and underpayment of deed tax.

59. The land transfer fees, land compensation fees, resettlement subsidies, compensation for attached structures, compensation for young crops, demolition compensation fees, and municipal construction supporting fees paid as per regulations have not been included in the calculation for paying deed tax.

VII. Stamp Duty

60. When signing purchase and sale contracts or contract-like vouchers (including supply, pre-purchase, procurement, combination of purchase and sale, cooperation, adjustment, compensation, barter, etc.), the stamp duty has not been affixed according to the purchase and sale amount under the "Purchase and Sale Contract" tax item. Particularly for adjustment and barter contracts, the full amount (except as otherwise provided) has not been included.

61. Contracts for the transfer and assignment of real estate and land use rights have not been declared for stamp duty under the "Property Transfer Document."

62. When investors undergo equity changes and register the equity change with the Market Supervision Administration, they have not declared and paid stamp duty to the tax authorities.

63. Enterprises that sign processing and customization contracts provided by the entrusted party, where the contract does not distinguish between the processing fee and the raw material amount, have not affixed stamp duty according to the total amount under the "Processing Contract." If the contract separately records the processing fee and the raw material amount, the stamp duty has not been affixed separately according to the "Processing Contract" and "Purchase and Sale Contract" at the time of signing.64. For taxable contracts that have already been stamped, if the amount stated is increased after modification, the additional amount is not subject to the supplementary payment of stamp duty. For contracts that have been signed but not fulfilled, stamp duty has not been paid as required.

65. There is a risk of incorrect application of tax rates and tax items. For the same voucher that contains two or more economic matters, if different tax items and rates apply, and the amounts are recorded separately, the tax payable should be calculated separately for each and then added together to affix the stamp duty accordingly; if the amounts are not recorded separately, the stamp duty should be affixed according to the higher tax rate.

66. When signing a framework contract without an amount, no stamp duty is affixed or only a 5-yuan stamp is affixed, and no supplementary stamp duty is paid as required upon actual settlement.

VIII. Urban Land Use Tax

67. After obtaining the right to use land, the taxpayer has not registered the tax source information in a timely and accurate manner as required, nor has the urban land use tax been declared.

68. The area declared for urban land use tax is less than the area registered in the land information or if there is a change in the land area that has not been promptly reported and corrected in the tax source information, leading to an inaccurate declaration of urban land use tax.

69. If a business should legally terminate its obligation to pay urban land use tax due to changes in the physical or legal status of real estate or land, it has not timely processed the termination of the obligation.

70. If a business owns both taxable and tax-exempt land, and the boundary between the taxable and tax-exempt areas is unclear, resulting in incorrect tax declaration and payment.

71. For those applying for preferential relief from urban land use tax due to difficulties, if the preferential tax procedures are not properly handled as required, and the tax payment is calculated and paid less than it should be.72. Failure to report information on cross-district land tax sources has led to the underpayment of urban land use tax.

IX. Urban Maintenance and Construction Tax

73. The urban maintenance and construction tax, educational surcharges, and local educational surcharges have not been calculated and declared based on the actual legally paid value-added tax and consumption tax.

74. Tax declarations have not been made according to the applicable tax rates in the locality, and there is confusion in the application of tax rates for tax declarations. For taxpayers located in urban areas, the tax rate is 7%; for those in county towns, the rate is 5%; and for those not in urban areas, county towns, or towns, the rate is 1%.

X. Vehicle and Vessel Tax

75. Vehicles such as trailers that do not need to purchase or have not timely purchased compulsory traffic accident liability insurance have not declared and paid the vehicle and vessel tax.

76. During the period when vehicles and vessels are used to offset debts, the party holding the debt-offsetting vehicles and vessels has not declared the vehicle and vessel tax.

77. Tax-exempt vehicles, due to transfer, change of use, or other reasons, have lost their tax-exempt status, and have not re-declared and paid taxes to the competent tax authorities within 60 days from the date of loss of tax-exempt status. In cases where tax-exempt vehicles are transferred but still fall within the tax-exempt scope, the transferee has not re-declared tax exemption to the competent tax authorities within 60 days from the date of purchase or acquisition of the vehicle.

XI. Resource Tax

78. Resource tax has not been declared for the extraction or production of energy minerals, metal minerals, non-metal minerals, water and gas minerals, and salt.Twelve, Employment Security Fund for the Disabled

79. Failure to declare the employment security fund for the disabled. Starting from January 1, 2020, the fund is collected in tiers. Employers who arrange for the employment of disabled persons at a ratio of 1% (inclusive) or more but less than 1.5%, will be charged at 50% of the payable amount for three years; those with less than 1% will be charged at 90% of the payable amount for three years; for enterprises with a total number of employees of 30 (inclusive) or less, the collection of the security fund is temporarily exempted.

80. The number of employees and the total wage amount of unit employees declared for personal income tax do not match the information declared for the disabled employment security fund.