By Ben Lu

In relation to the act of tax evasion through the use of fraudulent VAT invoices to claim tax deductions, there are five different theoretical viewpoints in legal academia regarding the applicable legal theory and corresponding penalties:

1.Concurrent Punishment for the Crime of Issuing Fake VAT Invoices and Tax Evasion

2.Punishment According to the Principle of Consecutive Offenses

3.Application of the Principle of Special Law Prevailing Over General Law in Cases of Conflict of Legal Provisions

4.Aggravated Offense Based on Consequences

5.Absorption Offense Theory: Heavier Crime Absorbs the Lighter Crime

The author supports the fifth viewpoint.

1.Analysis of the First Viewpoint

The first viewpoint fails to recognize the inevitable connection between the crime of issuing fake VAT invoices and tax evasion, merely classifying them as two separate offenses based on their appearance and imposing concurrent penalties. This approach is excessively harsh on the offender and contradicts criminal law theory, making it unadvisable.

2.Analysis of the Second Viewpoint

According to criminal law theory, a "consecutive offense" occurs when an offender, while intending to commit one crime, inadvertently commits other distinct offenses. The crimes must be related in a way that one act leads to another—either methodically or causally. 

In this case, the principle of consecutive offenses seems to be applicable to the act of issuing fake VAT invoices and subsequently using those invoices to claim tax deductions. These two acts are carried out with the same intent of evading taxes, constituting two separate crimes under criminal law: the crime of issuing fake VAT invoices and the crime of tax evasion. Besides, issuing fake VAT invoices leads to the evading of tax methodically. 

But punishing according to the principle of consecutive offenses, with the more severe offense being applied, is not applicable here. Article 2 of the Criminal Law clearly stipulates: "The act of issuing fraudulent invoices to deceive the state out of tax payments... shall be punished under the crime of issuing fake VAT invoices.” 

3.Analysis of the Third Viewpoint

The conflict of provisions refers to situations where a criminal act might be covered by multiple legal provisions, and in such cases, only one provision is applicable, thereby excluding others. The prerequisites for a conflict of provisions include: (1) an act violating multiple legal provisions; and (2) a relationship of overlap between those provisions. The essential feature is that a single act fulfills the criteria for a single crime, and the appropriate legal provision should be chosen without implicating multiple offenses. Given that the crimes of issuing fake VAT invoices and tax evasion are defined separately under criminal law, they do not overlap in a way that would constitute a conflict of provisions. Therefore, the author disagrees with interpreting this case as one of legal conflict.

4.Analysis of the Fourth Viewpoint

The theory of aggravated offenses applies only in cases where the amount of tax evaded is extraordinarily large, the circumstances are particularly severe, or the loss to the state is especially significant. This is not applicable to the general act of tax evasion via fraudulent invoices.

5.Analysis of the Fifth Viewpoint

The theory of absorption offenses applies when multiple different crimes are committed, but one offense is absorbed by another due to the nature of the crimes. One crime is considered an inevitable method or result of another, thus only the more severe crime is punished. In the context of this discussion, the offender's intent in issuing fake VAT invoices is to use the invoices for tax deduction and therefore evade tax. As a result, the tax evasion offense is a natural consequence of the crime of issuing fraudulent VAT invoices, which perfectly aligns with the requirements for an absorption offense. As such, the crime of issuing fake VAT invoices, as the more severe crime, should be punished as the primary offense, absorbing the tax evasion offense.