China has taken a significant step in its efforts to combat tax evasion by officially prohibiting the practice of signing “dual contracts.” This move comes as part of an intensified crackdown on tax evasion and is outlined in the latest legal interpretation issued by the country’s highest court and procuratorate.
The Supreme People’s Court and the Supreme People’s Procuratorate jointly issued a judicial interpretation on Monday, explicitly identifying the signing of “dual contracts” as a method of tax evasion for the first time. This interpretation provides a solid legal foundation for judicial authorities to pursue cases involving such practices in the future.
The interpretation also includes clear sentencing guidelines for crimes related to tax evasion and defines new forms of tax evasion that will now be considered criminal offenses under the law. Specifically, “dual contracts” aimed at concealing income and assets or attributing income and assets under different names are now categorized as “using deception or concealment,” as stipulated in Article 201 of the Criminal Law.
This move signifies China’s commitment to strengthening its legal framework to combat tax evasion effectively. By outlawing “dual contracts” and providing clear guidelines for prosecution, authorities aim to deter individuals and entities from engaging in fraudulent practices that undermine the country’s tax system.
