Han Ximin
SHENZHEN police broke up four criminal rings for alleged involvement in false value added tax (VAT) declarations in a coordinated action Wednesday.
The VAT receipts were for gold transactions. The value and tax involved is estimated at 10 billion yuan (US$1.5 billion), Shenzhen police said Thursday. A total of 48 suspects had been arrested.
Most of the suspects are natives of Caozhou and Shantou cities and the major ringleader, identified only as Zhao, 40, and his accomplices signed purchase contracts with member enterprises of the Shanghai Gold Exchange and sold gold to users who did not require receipts at below-market prices.
With the purchase contracts and transaction certificates, they applied for and obtained VAT receipts from the Shanghai Gold Exchange. They then forged receipts for enterprises or sold them to other criminal organizations charging commission, police said.
The receipts Zhao obtained from the Shanghai Gold Exchange between 2008 and the first half of this year led to 79.3 million yuan in tax being evaded.
The four criminal rings provided 260 enterprises with forged receipts totalling 10.1 billion yuan in the past two years. The enterprises used the receipts to reduce the tax payable.
With the aid of the Shenzhen Office of State Taxation Administration and a two-month investigation, more than 200 police officers stormed 33 offices in five districts Wednesday, arresting 48 suspects.
According to Chinese law, fraud involving VAT could attract a death penalty if a large sum is involved.
