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China Criminalizes “Dual Contracts” in Crackdown on Tax Evasion

China has officially outlawed the practice of signing “dual contracts” in the midst of an intensified crackdown on tax evasion, as per the latest legal interpretation by the country’s highest court and procuratorate.

Issued on Monday by the Supreme People’s Court and the Supreme People’s Procuratorate, this judicial interpretation marks the first time that the signing of “dual contracts” has been explicitly identified as a method of tax evasion. This move provides a solid legal foundation for judicial authorities to pursue cases of tax evasion involving such practices in the future.

The interpretation offers clear sentencing guidelines for crimes related to tax evasion and defines new forms of tax evasion that would now be considered criminal offenses under the law.

According to the interpretation, “dual contracts” to conceal income and assets or attribute income and assets under other names should be considered as “using deception or concealment” stipulated in Article 201 of the Criminal Law.”

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