China's Tax Authority Exposes Three 'Invoice Economy' Cases: Fraudulent Invoicing Reaches Nearly 8.8 Billion Yuan
China's State Taxation Administration exposed three typical 'invoice economy' cases involving fraudulent invoicing to claim subsidies or inflate sales, with the largest case amounting to nearly 8.8 billion yuan.
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On October 19, 2026, China's State Taxation Administration (STA) collectively exposed three cases related to rectifying tax issues in the so-called 'invoice economy'. This term refers to schemes where illegal actors use shell companies to issue false invoices or engage in circular invoicing among affiliated enterprises, artificially inflating sales volumes to create a facade of 'digital prosperity' and thereby defraud fiscal subsidies or facilitate financing.
In the Jiangxi case, an e-commerce company introduced by the Nanchang Economic and Technological Development Zone Management Committee illegally issued proxy invoices totaling 4.34 billion yuan and obtained local fiscal subsidies worth 24.0751 million yuan. The tax authorities have filed a case for investigation, and the local discipline inspection commission is probing the misconduct of relevant personnel.
In the Guangxi case, an agricultural development company used fake qualifications to secure pig purchase and sales contracts with multiple local state-owned enterprises (SOEs). It cumulatively issued invoices worth nearly 8.8 billion yuan. The company lured SOEs into taking bank loans to prepay for goods, after which its actual controller fled abroad, leaving several SOEs unable to recover huge funds. Public security organs are investigating this criminal case.
In the Yunnan case, a criminal gang established a company that falsely issued VAT special invoices totaling 27.3997 million yuan and defrauded 10 million yuan in local government equipment purchase subsidies. The ringleader has been sentenced to prison and fined.