After tax inspections of multiple enterprises, legal representatives, actual controllers, and senior executives bear the responsibility for making up unpaid taxes.

In recent years, numerous cases have been publicly posted on the China Judgments Online platform wherein corporate legal representatives, actual controllers, and senior executives were held liable for paying back taxes, late-payment surcharges, and even faced criminal liability—following corporate tax arrears or involvement in receiving fictitious invoices. These cases span broad geographic regions, involve substantial compensation amounts, and carry high legal risks; consequently, the tax-related risks confronting corporate legal representatives, actual controllers, and senior executives have sharply increased. No. Case Number Brief Case Facts Parties Held Liable 1 (2020) Liaoning 0203 Criminal Judgment No. 269 The tax authority issued a notice to a company demanding payment of back taxes and late-payment surcharges. The company refused to comply, citing that its former actual controller and former legal representative, Mr. Zhang, had embezzled corporate assets during his tenure and had since departed the company. Both the company and Mr. Zhang were subsequently prosecuted for tax evasion. The trial court ruled that both the company and Mr. Zhang were guilty of tax evasion; additionally, Mr. Zhang was found guilty of embezzlement of corporate assets. Company, Legal Representative, Actual Controller 2 (2020) Beijing 0111 Criminal Judgment No. 460 The tax authority demanded that a company pay back taxes. Although the company paid part of the amount due, it left the remainder unpaid, resulting in tax arrears. Later, the tax authority discovered that the company’s legal representative, Mr. Wang Q., had deposited proceeds from property sales into a bank account not registered with the tax authority. The procuratorate thus charged Mr. Wang Q. with the crime of evading collection of overdue taxes—a charge upheld by the court. Legal Representative 3 (2020) Qinghai 2222 Criminal Judgment No. 4 The tax authority repeatedly issued ‘Tax Matters Notices’ to a company and contacted its legal representative, Ms. Han, by telephone, ordering the company to pay outstanding taxes and late-payment surcharges. Ms. Han refused to cooperate, citing lack of corporate funds. Subsequently, the procuratorate charged both the company and Ms. Han with the crime of evading collection of overdue taxes—a charge upheld by the court. Company, Legal Representative 4 (2019) Zhejiang 1126 Civil Judgment No. 237 Mr. Hu X., the legal representative of a company, went missing during the company’s bankruptcy liquidation process, failing to provide information on the company’s actual assets or its accounting books and other documents. As a result, the debtor’s assets could not be traced and liquidation could not proceed. Moreover, no evidence existed proving that the company’s assets were independent from Mr. Hu X.’s personal assets. Accordingly, the tax authority sued Mr. Hu X. before the people’s court, seeking joint and several liability for the company’s debts—a claim upheld by the court. Legal Representative 5 (2015) Wenzhou Longwan Commercial Judgment No. 1047 The tax authority alleged that Mr. Wang, as legal representative of a company, refused—during bankruptcy proceedings—to submit authentic and complete financial ledgers upon notification, preventing the bankruptcy administrator from tracing the company’s assets. As a creditor of the company, the tax authority thus sought joint and several liability from Mr. Wang—a claim upheld by the court. Legal Representative 6 Shenyang Tax Inspection Division Decision (2021) No. 785 The tax authority determined that an enterprise had concealed auction commissions, constituting tax evasion, and imposed a penalty exceeding three times the evaded tax amount. However, as the enterprise had already been deregistered, the tax authority directly pursued the individual who operated the enterprise prior to its deregistration for recovery of the tax and penalty. Actual Operator 7 (2021) Guangdong 01 Civil Final Judgment No. 17268 A company was determined by the tax authority to have issued fictitious value-added tax (VAT) invoices. After paying back taxes and late-payment surcharges, the company filed a claim for compensation against Mr. Zhang H., its head of finance, arguing that issuing VAT invoices fell within his routine financial duties and that he bore responsibility for safeguarding the company’s annual accounting records. The court ruled that Mr. Zhang H. must bear 70% of the tax liability plus corresponding late-payment surcharges. Senior Management

‘Comprehensive Guide to Equity-Related Taxation’ (Part III)

As China’s economy develops and tax system reforms advance further, taxation issues occupy a pivotal position in corporate risk management and cost-optimization decision-making. Tax lawyers—proficient in tax laws and regulations, accounting, and finance—participate actively across various corporate activities, making significant contributions toward revenue generation, cost reduction, and enhanced operational efficiency. This ‘Comprehensive Guide to Equity-Related Taxation’ course aims to deliver a thorough analysis of fundamental tax rules applicable to equity-related matters, helping all professionals interested in tax practice eliminate blind spots in tax knowledge, optimize transaction structures, and handle equity-related transactions with confidence. Organized by subject, the course systematically categorizes core tax rules covering the entire lifecycle of equity: investment, profit distribution, additional capital contributions, equity transfers, and corporate liquidation. Real-world case studies are used throughout to illustrate and clarify each rule. Emphasis is placed on practical implementation: for each relevant tax type, the course organizes content around the six key elements of taxation—tax payment method, withholding agent, calculation of taxable income, applicable tax category and rate, timing of tax liability arising, and place of tax payment—ensuring clarity and actionable understanding.

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Oil-Dri Corp of America VP Christopher B. Lamson had 2,228 shares withheld on Oct 19, 2026, to cover tax liabilities from restricted stock vesting at $70.49 per share.

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