Senior Manager is punished by Fake Apartment Rent Agreement! Featured

Monday, 27 February 2023 14:11

The Shanghai A foreign company has employed a foreign senior manager as CTO. As agreed in the employment contract, the CTO has had rights to refund the apartment rent to A foreign company within the budget of RMB30,000 per month.


The CTO has found a senior apartment by the agency, and the monthly rent fee has been quoted at RMB 20,000. In order to make full use of the rent allowance policy in the employment contract, the CTO has signed a fake rental contract with landlord, they have agreed on the rent fee has been RMB 30,000 per month, as well as the monthly charge amount issued by the landlord has been also RMB 30,000 per month. But the CTO has only paid RMB 20,000 per month actually.


Although the rent contract and charge have been recorded after passing the financial review of the A foreign company, it hasn’t verified the reality of this deal and checked payment voucher provided by the CTO. Soon after, through the big data analysis function of Golden Tax Ⅲ,the tax bureau has found that the landlord financial and tax data have been abnormal. After the tax bureau has checked and compared the accounts of A foreign company and the landlord, it has confirmed that the landlord has invoiced falsely and A foreign company has been fictitious components. Due to the illegal truth has been conclusive, it eventually led the landlord, the A foreign and the CTO have been all seriously punished by the tax bureau. Besides, the CTO has been directly dismissed from the overseas headquarters of the foreign company because of serious infringe of company’s rules and regulations.


Dongjin Remind:

Since the reimbursement of corporate executive expenses is a key area for tax bureau, in addition, the big data analysis function of Golden Tax Ⅲ is relatively powerful. It is easy for the tax bureau to detect that corporate executives are invoicing and the illegal behavior of fictional composition.


Dongjin suggests that companies should strengthen contracts for reimbursement of executive expenses, review of invoices and remittances. To achieve the “three streams of consistency” of contract flow, invoice flow and capital flow.


If companies have any questions, welcome to Dongjin for consulting.


Mike Chang


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