In August 2026, a document titled ”Guidelines for Tax Audits in the Second Half of 2026” drew significant attention within the finance and tax community. The document clearly states that from August to December 2026, the overarching approach to tax audits nationwide will be ”data-driven tax administration, multi-departmental joint audits, and end-to-end, in-depth verification.” Data from six departments—tax authorities, police, banking, customs, medical insurance, and market regulation—has been fully integrated. Random spot checks have been replaced by targeted, industry-specific crackdowns. Four major categories of tax violations—issuing fraudulent invoices, off-the-books income, improper use of tax incentives, and concealment of funds—have been identified as the top priorities for enforcement throughout the year. More crucially, Phase IV of the Golden Tax Project has shifted the focus of oversight from ”auditing accounts” to “monitoring individuals”—six key categories of personnel—including corporate legal representatives, financial officers, tax filers, actual controllers, shareholders, and key business operators—have been closely linked to the system and are subject to comprehensive, in-depth monitoring.

This means that the era when businesses could get by simply by making their ”books look good” is completely over. After the full implementation of the ”Golden Tax Phase IV” system in 2026, more than 40 departments—including tax authorities, banks, market regulation agencies, social security agencies, customs, public security, housing and urban-rural development agencies, and logistics platforms—will conduct real-time, synchronized cross-checks of 138 categories of business data. Corporate bank accounts, personal transaction records of legal representatives and shareholders, the number of social security enrollees, utility consumption, logistics orders, e-commerce sales, and real estate information—all data will be automatically aggregated into the tax system’s risk model. Behaviors such as concealing income through private accounts, inconsistencies in the logic of purchase and sales invoices, severe discrepancies between revenue and profit, and mismatches between the number of social security enrollees and declared employees will trigger alerts without the need for manual spot checks. If 2025 is the ”launch year” for Phase IV of the Golden Tax Project, then 2026 will be the “year of deep implementation”—a new regulatory system featuring big data-driven intelligent comparisons, automated risk alerts, and precise identification of anomalies is now fully operational on a routine basis.

The normalization and precision of tax audits ensure that every unusual transaction is exposed through data analysis. Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the United States, Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and other locations, as well as corporate annual inspection audits, bookkeeping and tax filing, tax compliance, business registration changes, bank account openings, ODI filings, FDI filings, and other corporate services, as well as Hong Kong residency applications, renewals, and permanent residency services; Singapore Employment Pass (EP) application services; and one-stop solutions for cross-border e-commerce support and management. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

I. Eight Key Areas of Audit Focus: Comprehensive Self-Inspection Checklist for Enterprises

According to the audit guidelines, the eight key areas of focus for general audits in the second half of 2026 apply to all enterprises, without exception.

Key Point 1: Issuing False Invoices (the First Red Line for Tax Audits). Shell companies engaging in aggressive fraudulent invoicing, circular invoicing, discrepancies between the descriptions of purchased and sold goods, and cash-out schemes involving fund recycling—these are typical patterns of fraudulent invoicing. In 2026, authorities will focus on monitoring service fee invoices issued by medical device CSO companies and flexible employment platforms, implementing two-way traceability and accountability across the entire supply chain. With the full-process traceability of digital and electronic invoices, the entire chain of issuance, circulation, and tax credit claims for every invoice is fully traceable within the tax system, leaving virtually no room for fraudulent invoicing to go undetected.

Key Point 2: Concealing Income Through Personal Bank Accounts (A Major Problem Area). Legal representatives, shareholders, and finance staff use their personal bank cards, WeChat, and Alipay to receive business proceeds, channel rebates, and sales commissions, which are not recorded in the books or reported for VAT and corporate income tax. This is currently the tax-related violation being targeted most aggressively. The "Golden Tax Phase IV" system has implemented data sharing between banking and tax authorities, resulting in unprecedented monitoring of large and frequent transfers from corporate to personal accounts, as well as shareholder loans that remain outstanding at year-end (which are treated as 20% dividend personal income tax). A typical audit case shows that a trading company received a cumulative total of 12 million yuan in customer payments through the personal bank card of the legal representative’s wife. After the system automatically identified the funds as abnormal, the company was required to make back payments of VAT, corporate income tax, and late payment penalties totaling over 4 million yuan.

Priority 3: Special Campaign to Address Irregularities in Flexible Employment Platforms (Key Special Initiative for the Second Half of the Year). Strict investigations will be conducted into three types of violations: the absence of genuine employment scenarios, with platforms issuing labor service invoices on behalf of employers to inflate costs; fabricating freelancer information to embezzle funds for sales kickbacks; and using flexible employment to alter the nature of income in order to evade individual income tax on wages and salaries as well as social insurance contributions. Once verified, both the hiring company and the flexible workforce platform will face penalties, and all input tax credits will be revoked. This special campaign has an extremely broad impact—a large number of cross-border e-commerce companies, real estate brokers, and insurance agencies are using flexible workforce platforms.

Key Point 4: Illegally claiming various tax incentives. Artificially splitting multiple small and micro enterprises to fraudulently claim income tax incentives, inflating R&D expenses for additional tax deductions, falsifying high-tech enterprise qualifications, and issuing shell invoices to obtain tax rebates from low-tax jurisdictions. R&D expenses and clinical trial costs of medical device companies are the focus of these audits. Starting in 2026, tax incentives will no longer be granted on a ”file and receive” basis with no long-term post-audit scrutiny; tax authorities will conduct quarterly and annual reviews of eligibility for these policies.

Key Point 5: Unusual Carryovers in Accounts Receivable and Payable. Large, long-outstanding accounts receivable and payable; interest-free loans between affiliated companies; and the gratuitous transfer of goods—tax authorities assess interest and tax these transactions as deemed sales. This is a ”hidden tax trap” common among many corporate groups and affiliated companies—while many businesses believe that internal fund transfers are not subject to taxation, tax authorities actually have the authority to assess and collect taxes on such transactions.

Focus Area 6: Audits of Equity Transfers and Individual Income Tax for High-Net-Worth Individuals. The transfer of equity at below-market prices, “shadow contracts,” hidden dividends, and failure to report personal income tax on large brokerage commissions, as well as retrospective audits of financial records dating back 3–5 years. Personal income tax compliance among high-net-worth individuals has become a key focus of tax audits.

Key Point 7: Routine audits of minor tax categories. Underreporting and misreporting of stamp duty, property tax, urban land use tax, and supplementary taxes and fees have been incorporated into routine audits and are no longer considered marginal tax categories. In the past, many companies neglected to file returns for these ”minor taxes,” assuming that the small amounts involved would not attract scrutiny; however, starting in 2026, these “minor taxes” have become standard items in routine tax audits.

Key Point 8: Strict Tax Settlement Requirements for Business Deregistration. Preliminary tax risk screening prior to simplified deregistration: Companies that conceal inventory, accounts receivable, or unreported revenue cannot be deregistered directly; all outstanding issues will be traced back and settled in full.

The eight key audit areas cover the entire lifecycle of a business, from operations to deregistration. Qicaiying Group specializes in providing domestic and international company registration services in Shenzhen, Guangzhou, Shanghai, Beijing, Hangzhou, Hong Kong, the United States, Japan, South Korea, Southeast Asia, Singapore, the British Virgin Islands (BVI), the Cayman Islands, and other locations, as well as corporate annual inspection audits, bookkeeping and tax filing, tax compliance, information updates, bank account opening, ODI filing, FDI filing, and other corporate services; Hong Kong residency application, renewal, and permanent residency services; Singapore EP application services; and cross-border e-commerce support and managed operations—all as part of our one-stop service. If you have any needs or are interested, please feel free to contact me at any time (Consultation Hotline: 18676749275, add WeChat: Qicaiyingjituan).

II. ”The Era of Background Checks”: In-Depth Oversight of Six Categories of Key Personnel

The most fundamental change in tax regulation in 2026 is a shift in logic—from ”auditing accounts” to ”auditing individuals.” In the past, tax audits focused on verifying a company’s official ledgers, invoices, and financial statements; as long as the books looked ”good,” many gray-area practices were difficult to trace. Now, the focus of regulation has expanded from companies to individuals.

Six categories of key personnel under surveillance. Legal representatives, financial officers, tax filers, actual controllers, shareholders, and key business operators. The personal information of these six categories of individuals is deeply linked to the company’s tax data—ensuring comprehensive real-name tax filing, with every business transaction tied to a specific operator.

Five Dimensions of Bypassing Surveillance. First, real-time data exchange and sharing among tax authorities, banks, market regulators, social security agencies, customs, and foreign exchange authorities. Second, AI-powered big data automatically cross-checks business, financial, and personnel information. Third, all transaction flows in corporate accounts as well as the private accounts of shareholders, employees, and their relatives are subject to monitoring. Fourth, fully electronic invoices are digitally tracked throughout the entire process, leaving no gaps in invoice traceability. Fifth, full coverage of real-name tax filing, with operations traceable to specific individuals.

“The ”dual investigation and dual penalty” mechanism. In 2026, the ”dual investigation and dual penalty” mechanism will be fully implemented in tax audits. In addition to enterprises facing back taxes, late payment penalties, and fines, actual controllers, legal representatives, financial officers, and tax filing personnel will all be held accountable. If financial personnel are involved in issuing fraudulent invoices or filing false tax returns—and the amount of tax fraud exceeds 50,000 yuan or results in underpayment of taxes exceeding 100,000 yuan—they will face criminal liability, and this will affect their personal credit records and professional qualifications.

This means that finance professionals can no longer use the excuse that ”the boss told me to do it” to shirk responsibility. Every signature, every filing, and every invoice is linked to the legal liability of a specific individual. For finance professionals, 2026 marks the ”first year of professional risk”—compliance is no longer an option for companies, but a matter of survival for finance professionals.

III. Three-Year Initiative to Strengthen Foundational Capabilities: Phased Implementation Timeline for 2026–2028

The strengthening of tax oversight is not a one-time campaign, but a three-year systematic action plan.

2026: The first year of legislation; the regulatory system will be fully implemented. The “Tax Collection and Administration Law” and the “Value-Added Tax Law” have officially taken effect, establishing a legal framework for tax supervision using big data and AI. Phase IV of the Golden Tax Project has been fully launched nationwide. Joint law enforcement by multiple departments has become routine. Efforts are focused on cracking down on two major types of frequent violations: concealing income through private bank accounts and issuing fraudulent invoices.

2027: The First Year of Data Interoperability—Automated, Second-Level Comparison of the Four Data Streams. Fully automated data integration between tax and banking systems eliminates the need for manual cross-checking. The systems automatically match the four key flows: contract, invoice, funds, and goods. Tax-related anomalies trigger alerts within seconds, and risk leads are managed through a fully closed-loop process. High-income individuals, high-net-worth individuals, and key industries undergo routine, real-time risk scanning.

2028: The first year of unified law enforcement; historical issues will be subject to retroactive collection indefinitely. Unified enforcement standards apply nationwide for tax audits and risk assessments, eliminating regional disparities in regulatory leniency. Past tax violations are subject to indefinite back-tax collection; there is no ”statute of limitations” for such cases. Leveraging digital tax administration, the scope for gray-area tax practices has been virtually eliminated.

The three-year timeline sends a very clear message: the window of opportunity for tax compliance is rapidly closing. In 2026, companies can still ”catch up”; in 2027, ”invisible oversight” will take effect; and by 2028, there will be ”nowhere to hide.” If companies wait until 2027 or even 2028 to start taking compliance seriously, it may already be too late.

IV. Five Compliance Measures Companies Can Implement Immediately

In light of the eight key audit priorities for the second half of 2026 and the three-year “Strengthening Foundations” initiative, companies should take immediate action in the following five areas.

Action 1: Review the vouchers for service fees, consulting fees, and conference fees from the past two years. Focus on identifying any large-amount service fee invoices that lack supporting documentation of actual business transactions. Ensure that supporting materials—such as meeting attendance records, on-site documentation, and academic records—are complete. If an invoice exists without supporting business documentation, taxpayers should proactively file an amended tax return to increase the tax liability.

Action 2: Stop depositing business funds into shareholders’ and finance staff’s personal accounts. All revenue must be recorded in the company’s accounts. Any payments already received through personal accounts should be recorded in the accounts and reported for tax purposes as soon as possible. Personal loans from shareholders must be repaid in a timely manner by the end of the year to avoid being taxed as dividends.

Action 3: Streamline commission structures for flexible employment to ensure compliance. Eliminate the practice of purchasing services solely to meet cost targets. Ensure that flexible staffing is supported by genuine business scenarios, and retain complete documentation, such as service agreements, deliverables, and personnel information.

Step 4: Verify the purchase, sales, and inventory ledgers. Ensure consistency among the four flows: documents, goods, funds, and contracts. Any discrepancies in the names of purchased and sold items must be corrected immediately. If there are discrepancies between the recorded inventory and the actual inventory, the cause must be identified and appropriate accounting adjustments made.

Action 5: Conduct regular tax health checks. We recommend commissioning a professional firm to conduct a comprehensive tax health check once per quarter, covering areas such as compliance with tax filing requirements for all tax types, compliance with invoice management regulations, the accurate application of tax incentives, and compliance with related-party transaction regulations.

Qicaiying Group has a team of experienced tax professionals who provide enterprises with end-to-end professional services, including tax audit response, tax health checks, and the establishment of compliance systems. In the ”Golden Tax Phase IV” era—where tax authorities are focusing on identifying taxpayers—professional tax compliance support is a company’s most critical line of defense against risk. Don’t wait until you receive a warning notice to scramble for a solution; the right approach is to proactively establish a compliance system in advance. Consultation Hotline: 18676749275. Add us on WeChat: Qicaiyingjituan.