Core Viewpoint - The article highlights the issue of tax evasion through income splitting by businesses, particularly small and micro enterprises, which exploit tax incentives designed for them [1][2]. Group 1: Tax Evasion Cases - A case in Ningbo revealed that an individual, acting as a general contractor, established nine individual businesses to split income and evade tax obligations, resulting in a total tax underpayment of 3.4592 million yuan [1]. - The tax authorities imposed a penalty of 5.1888 million yuan, including back taxes and fines, on the individual for fraudulent tax declarations [1]. Group 2: Tax Policies and Exploitation - The government has implemented tax relief policies for small and micro enterprises, such as VAT exemptions for monthly sales below 100,000 yuan and reduced corporate income tax rates for small profit enterprises [1]. - However, some individuals exploit these policies by splitting income to qualify for tax benefits, which constitutes tax evasion [2]. Group 3: Legal and Regulatory Insights - Experts emphasize that businesses must operate with genuine commercial purposes and maintain independent operational capabilities to qualify for tax benefits [2]. - Common methods of tax evasion include splitting income across multiple entities and manipulating financial reporting periods to stay under tax thresholds [3]. Group 4: Compliance and Best Practices - The article stresses the importance of compliance with tax laws and the principle that substance over form should guide tax practices [3]. - Businesses are encouraged to integrate compliance into their operational decisions rather than attempting to exploit tax loopholes [3].