Core Viewpoint - The article highlights common tax risks in the agricultural sector, emphasizing the importance of compliance with tax regulations to avoid penalties and ensure the benefits of tax incentives are properly utilized [2][6]. Tax Risk Areas - **Incorrect Application of VAT Exemption Policy**: Agricultural producers selling self-produced agricultural products are eligible for VAT exemption. However, those selling both exempt and taxable goods must separately account for sales to qualify for the exemption [2]. - **Incorrect Application of Corporate Income Tax Exemption Policy**: Company A, which sells both self-grown and purchased seedlings, misreported sales figures, leading to underpayment of VAT and subsequent penalties. The law states that agricultural producers are exempt from VAT on self-produced agricultural products [3][4]. - **Corporate Income Tax Exemption for Specific Activities**: The Corporate Income Tax Law allows for exemptions for income from agricultural, forestry, animal husbandry, and fishery projects. Specific activities such as irrigation and initial processing of agricultural products are also eligible for tax exemptions [4][5]. Compliance Guidance - Companies engaged in agricultural production and initial processing must accurately allocate costs and revenues between different projects to benefit from applicable tax incentives [5].