144 construction invoices, with a total face value of ¥39.82 million, were all included in the land value-added tax settlement costs of a real estate project.
The project names on paper were complete: sewage discharge, communications, environmental protection... but when investigators arrived at the registered addresses of the invoicing companies, they could not find a single one.
Case file sketch
Disclosure date
March 6, 2026
Company involved
Guangxi F Real Estate Investment and Development Company
Main issues
Accepting fraudulently issued construction invoices and tampering with voucher information to inflate settlement costs
Tax underpaid
Land value-added tax of ¥26.45 million and corporate income tax of ¥3.71 million
Case progress
Recovery of taxes, late payment surcharges and fines; case transferred to public security authorities
The leads did not emerge from the settlement statement
While investigating a gang that fraudulently issued invoices, public security authorities found that 10 related companies had issued 144 special VAT invoices to Company F in a concentrated manner.
These 10 companies shared several similarities to an excessive degree: no relevant construction qualifications; the same legal representative; establishment dates only about one month apart; and no trace at their registered addresses.
Yet the invoices had been booked and were all deducted as project costs in the land value-added tax settlement.
One team inspected the projects, another pored over the books
The task force did not investigate solely along the invoice trail but pursued two lines of inquiry.
Inspection approach
01
Questioned the nominal legal representatives of the 10 invoicing companies about actual operations and invoicing
02
Conducted on-site verification of registered addresses and confirmed no operational trace of the companies concerned
03
Obtained bank records of Company F, upstream companies and related individuals, and found no corresponding project payments
04
Compared the books with the settlement filings and found that project names and expense descriptions had been altered
The first line of inquiry quickly reached the substance of the business: the nominal legal representatives knew nothing about the company's operations or the invoices; the intermediaries involved confessed that the construction invoices were intended to "pad" the settlement costs. The bank records also showed no payments corresponding to the invoiced amounts.
The invoice flow, business flow and fund flow—all three lines were broken.
Visual illustration: verification of liquidation project boundaries and unrelated costs (not a project diagram involved in the case)
Another thread, hidden in the shortened summaries
The ledger review uncovered different problems.
The design, survey and environmental impact assessment costs of other land parcels were changed into generic summaries without specific project names; the fine decoration and main structure costs of the marketing center were also replaced with "temporary facility construction settlement costs" and placed together into the liquidation costs of the current project.
Once the names are shortened, cost attribution becomes blurred. But the boundaries of the liquidation unit do not change just because a few words in the summary are altered.
Upon verification, Company F inflated liquidation costs by RMB 10.45 million by tampering with voucher information and other means; together with 144 fraudulently issued construction invoices, this ultimately resulted in underpayment of land value-added tax of RMB 26.45 million and corporate income tax of RMB 3.71 million, totaling RMB 30.16 million.
Editorial observation
This case involves two completely different risks: one is that the construction never occurred at all; the other is that the costs genuinely occurred but do not belong to this liquidation project. The former requires checking business authenticity, while the latter requires checking cost attribution; the two cannot be conflated into a single phrase, "invoice compliance."
Before liquidation, walk through the project again from start to finish
Operator self-check
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Whether the contractor has qualifications, personnel and equipment matching the project content
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Whether the contract, site instructions, quantity confirmation, acceptance, settlement and payment correspond continuously
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Whether each cost belongs to this liquidation unit and the corresponding development phase
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Whether costs for sales offices, model homes, marketing centers, etc. comply with the local current deduction rules
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Whether voucher summaries can restore the original project, and whether they conceal other land parcels or other uses
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Whether suppliers established in a concentrated manner, under the same control or invoicing through the same contact have undergone enhanced verification
Land value-added tax liquidation is not about moving "construction costs" from the general ledger into the tax return. Project boundaries, actual quantities and final payments—missing any one may leave gaps that cannot be explained.
Source: Nanning Tax Service, State Taxation Administration, "China Tax News: Thoroughly Investigate Suspicious Invoices and Squeeze Out the 'Water' in Land Value-Added Tax Returns," published on March 6, 2026.
This article is compiled from publicly disclosed tax case notices and is intended only as a general risk alert; real estate project liquidation should be judged in light of locally effective policies and specific project materials.