Views: 0 Author: Site Editor Publish Time: 2024-05-09 Origin: Site
Recently, news about customs cracking down on steel exports without paying VAT has been widely circulated within the steel industry. The gist of the news is that "starting from May 1st, Chinese customs will focus on inspecting the export of hot-rolled coils of Q195 and Q235B, for every shipment. Export without paying VAT will be greatly affected. If discrepancies are found in the invoices, serious penalties will be imposed. Relevant local customs departments are also holding meetings to discuss the inspection and verification of invoice clearance."
At the same time, the Qingdao Municipal Taxation Bureau of the State Taxation Administration announced the case analysis of investigating a certain exporter's export without paying VAT (involving steel). According to the penalty decision, the enterprise exported goods without paying VAT under the pretext of buying bill export for two years, and is required to pay nearly tens of millions of yuan in various taxes related to self-operated income.
Last year, China's steel export volume achieved a year-on-year increase, with a significant increase in quantities to Southeast Asia.
On February 28th, the Institute of Metallurgical Industry Information Standards (hereinafter referred to as the Institute) released the "Analysis of China's Steel Import and Export in 2023", showing that China's steel exports reached 90.264 million tons in 2023, a year-on-year increase of 36.2%, reaching a new high since 2017, the fourth highest in history; steel imports were 7.65 million tons, a year-on-year decrease of 27.6%, the first time below 10 million tons since public data records began in 1995.
China's Steel Import and Export on a Monthly Basis
The previous peak period of steel exports was from 2014 to 2016. According to a report by Huachuang Securities, at that time, domestic demand was still good, but a large amount of off-balance sheet supply and backward production capacity resulted in severe actual oversupply, rapid price decline in domestic steel, and severe losses for steel companies in domestic sales, leading to increased overseas sales.
In terms of the destination of China's steel exports, there was a significant increase in Southeast Asia.
According to data from the Institute, China's steel exports to Asia reached 613.9 million tons last year, a year-on-year increase of 43.37%, accounting for 68% of the total steel exports; exports to Latin America and Africa were 114.5 million tons and 99.3 million tons respectively, with year-on-year increases of 44% and 24% respectively; exports to Oceania were 0.93 million tons, a year-on-year increase of 10%; exports to Europe were 50.8 million tons, a year-on-year increase of 3.7%; exports to North America were 14.3 million tons, a year-on-year decrease of 16%. According to statistics from Huachuang Securities, among the top ten countries with the largest increase in steel exports in 2023, Vietnam ranked first with 3.79 million tons, and three Southeast Asian countries, Thailand, Indonesia, and Malaysia, also ranked among the top ten.
Top 10 countries in terms of steel export volume in 2023
Top 10 countries with incremental steel export volume in 2023
Buying bill export refers to the fraudulent trade activities where entities or individuals without import and export rights use legal export customs clearance documents provided by other import and export companies with operating rights to conduct fictitious export transactions. These activities usually involve tax evasion, fee evasion, exchange control evasion, and document evasion, aiming to forge or purchase customs clearance documents of other import and export companies and conduct foreign trade exports in their names.
Generally, buying bill exports belong to a gray area and are a tacitly approved business model under the premise of national encouragement of exports. However, this has also led to different buying bill models, such as those not involving tax refunds and those involving fraudulent invoices to obtain national tax refunds. Thus, there is a peculiar situation where the buying company exports goods and still receives refunds.
Buying bill exports have frequently occurred in China over the years, but since the end of 2022, this situation has become very serious. The quantity of goods exported overseas has continued to increase, but they cannot enter mainstream regular factories. Buying bill exports are stifling legitimate business, and no enterprise can compete with sellers who evade taxes and duties.
Since 2021, after the country canceled all export tax rebates for all types of steel, exporters no longer need to apply for export tax refunds from the tax authorities with invoices and export documents from upstream suppliers. Foreign recipients never need invoices from domestic exporters either, so domestic exporters have "goods that don't need invoices" on their hands, and these "invoices that don't need to be issued" can be issued to downstream users who "don't need goods but only need input invoices."
Downstream users can use low-priced purchase value-added tax invoices for input tax deduction without actually purchasing steel. Thus, everyone in the entire industry chain is happy, and each role earns some money—exporters make a few points selling tax invoices, downstream users who buy invoices without goods earn a few points of input tax deduction, and foreign recipients buy goods at low prices. But the only loser is our national tax revenue.
Therefore, low-priced exports are not frightening, but the heinous tax evasion and avoidance behavior spawned by low-priced exports are extremely serious and must be strictly investigated.
Article reproduced by a third party.
