Core Viewpoint - The article highlights the crackdown by tax authorities on tax evasion practices involving income splitting to exploit tax benefits intended for small and micro enterprises. This practice has been increasingly scrutinized, with several cases reported in 2023, indicating a significant focus on compliance and enforcement by tax departments [3][7]. Summary by Sections Tax Evasion Cases - Tax authorities have exposed multiple cases of income splitting to evade taxes, with at least seven similar cases reported in 2023. This method has become a target for strict enforcement by tax departments [3][4]. - A specific case involved Guangxi Gugu Dog Business Secretary Co., Ltd., which split its income across multiple related companies to qualify for tax benefits, resulting in a total tax shortfall of 1.1894 million yuan and penalties totaling 2.6467 million yuan [4][5]. Methods of Evasion - Companies have been found creating shell entities to transfer income and avoid tax thresholds. For instance, Anshun City Century Wedding Banquet Co., Ltd. transferred excess income to shell accounts to remain under the tax reporting limits, leading to a tax shortfall of 2.4977 million yuan and penalties of 3.9279 million yuan [5][6]. - Another case involved an individual, Xia Anyang, who registered multiple individual businesses to falsely declare income and evade personal income tax, resulting in a tax shortfall of 3.4592 million yuan and penalties of 5.1888 million yuan [6]. Enforcement and Compliance - The tax authorities are utilizing big data to identify suspicious activities, with the recovered tax amounts often exceeding the original evaded amounts by 1.5 to 2.3 times, indicating that tax evasion is not only risky but also financially detrimental [6][7]. - A tax official emphasized that lawful tax payment is fundamental for business survival and that exploiting tax benefits through deceptive practices undermines fair competition and market order [7].

Core Viewpoint - The tax authorities are intensifying efforts to combat tax evasion through income splitting, which has become a significant focus due to the economic downturn and the introduction of tax incentives for small and micro enterprises [2][5]. Summary by Sections Tax Evasion Cases - Three typical cases of tax evasion through income splitting were exposed, revealing that the final tax payments made were 1.5 to 2.3 times the amount of tax evaded [1][5]. - The tax authorities have identified at least seven similar cases of income splitting this year, indicating heightened scrutiny on this method of tax evasion [2]. Tax Incentives for Small Enterprises - China has implemented a series of tax incentives to support small and micro enterprises, including a reduced corporate income tax rate of 5% for small profit enterprises until the end of 2027, and a reduction in VAT rates for small-scale taxpayers [2]. Specific Cases of Tax Evasion - Guangxi Gugu Dog Business Secretary Co., Ltd. was found to have split its income among related companies to qualify for tax benefits, resulting in a total tax shortfall of 1.1894 million yuan, with penalties totaling 2.6467 million yuan [3][4]. - Anshun City’s tax bureau discovered that a company used shell individual businesses to evade taxes, leading to a tax shortfall of 2.4977 million yuan and penalties of 3.9279 million yuan [4]. - Ningbo's tax bureau uncovered that an individual registered multiple businesses to falsely claim personal income tax benefits, resulting in a tax shortfall of 3.4592 million yuan and penalties of 5.1888 million yuan [4]. Tax Authority's Approach - The tax authorities are leveraging big data to identify tax evasion risks, emphasizing a data-driven approach to tax enforcement [5]. - The tax authorities stress that legal compliance in tax payments is fundamental for business survival, and any fraudulent actions undermine the intended benefits of tax policies [5].