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In compliance with the system of value-added business tax in Taiwan, the invoice of input tax is provided with the right of tax credit, export tax-zero-rate, and tax refund for acquisition of fixed asset. Therefore, some business entities abuse the said right to declare or offset the payable tax with false input invoice, so as to lower their business tax and corporate profit tax. This study collects the relevant references and cases to specify the system of business tax and the category of bogus business entity, auxiliary with the judgment ruled by the supreme court. In terms of the issue of the “Falsely report input tax”, it may be divided into four subjects respectively as the identification of “Real transaction party”, the evidence adduced by tax collection authority, the authenticity of transaction object, and the burden of proof, as well as the distribution of coordination and liability. Moreover, we also explore divergences of the burden of proof and the coordination liability between Taiwan and China. We have presented the proposals specified as follows:
1).Enhancing the manpower of tax collection authority in investigation,
2).Establishing a specialized investigation mechanism organized by various district prosecutor’s offices and judges,
3).Teaching business entities how to avoid receiving the invoice issued by non-real transaction object,
4).Teaching business entities how to transact the situation once you have received the false input invoice.
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