Compiled from: Red Star News, Beijing Youth Daily
 
Case review
Recently, "Hangzhou medical aesthetics company fined over 88 million for tax evasion" trended on Weibo. The penalty reason shows that from January 2017 to November 2021, the company's branch, Qianhe Medical Aesthetics Clinic, provided medical aesthetic services, collected payments via personal bank accounts, and concealed revenue exceeding 4.755 billion yuan, which was not recorded in financial books. During this period, the company also concealed interest income of approximately 28.7968 million yuan from the hidden revenue.

 

The administrative penalty sparked widespread discussion. Many are puzzled: just how profitable is the medical aesthetics industry?

A single beauty clinic concealed revenue of 4.755 billion yuan in less than five years. If public revenue recorded in financial books were added, what scale would that be? While lamenting, the public can't help but sigh—medical aesthetics is indeed a "good business" for easy windfalls.
 
Hangzhou Tax Bureau fined the company 60% of the underpaid corporate income tax of about 147 million yuan, totaling approximately 88.2727 million yuan. This indicates the case was penalized as tax evasion. Based on known information, other possibilities beyond tax evasion have not yet been investigated.

 

 
Article 201 of the Criminal Law: Tax Evasion
A taxpayer who, by means of forging, altering, concealing, or unauthorized destruction of account books or vouchers, overstating expenses or understating or omitting income in account books, refusing to declare after being notified by tax authorities, or making false tax declarations, fails to pay or underpays the tax payable, where the amount of tax evaded accounts for more than 10 percent but less than 30 percent of the tax payable and is between 10,000 yuan and 100,000 yuan, or who has been subject to two administrative penalties by tax authorities for tax evasion and again evades tax, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and shall also be fined not less than one time but not more than five times the amount of tax evaded; where the amount of tax evaded accounts for more than 30 percent of the tax payable and is over 100,000 yuan, the offender shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years, and shall also be fined not less than one time but not more than five times the amount of tax evaded.

A withholding agent who, by means of the methods listed in the preceding paragraph, fails to pay or underpays the tax already withheld or collected, where the amount accounts for more than 10 percent of the tax payable and is over 10,000 yuan, shall be punished in accordance with the provisions of the preceding paragraph.

Where the acts described in the preceding two paragraphs are committed multiple times and have not been dealt with, the amounts shall be calculated cumulatively.
 
 
Article 63 of the Tax Collection and Administration Law
A taxpayer who forges, alters, conceals, or unauthorizedly destroys account books or vouchers, overstates expenses or understates or omits income in account books, refuses to declare after being notified by tax authorities, or makes false tax declarations, resulting in failure to pay or underpayment of tax payable, constitutes tax evasion. For a taxpayer who evades tax, the tax authorities shall recover the unpaid or underpaid tax and late payment fees, and impose a fine of not less than 50 percent but not more than five times the amount of unpaid or underpaid tax; if the act constitutes a crime, criminal liability shall be pursued in accordance with the law.

Where a withholding agent adopts the means specified in the preceding paragraph to fail to pay or underpay the taxes that have been withheld or collected, the tax authorities shall recover the unpaid or underpaid taxes and late payment surcharges, and impose a fine of not less than 50% but not more than five times the amount of unpaid or underpaid taxes; if the act constitutes a crime, criminal liability shall be pursued in accordance with the law.

 

 
[1] The author's perspective
In this case, we must not only recognize the harm tax evasion causes to legal interests but also see the underlying issues within the medical aesthetics industry.
 
A medical aesthetics company managed to conceal revenue of up to 4.7 billion yuan in just four years, indicating that its total income is far higher. The saying "everyone loves beauty" holds true, but in recent years, many distorted mindsets have emerged, with people undergoing endless plastic surgeries in pursuit of beauty. This has fueled the rapid growth of the medical aesthetics industry and led to the proliferation of unregulated institutions like bamboo shoots after rain. These institutions not only engage in arbitrary pricing but also have questionable professional competence. As a result, many consumers become victims, losing not only money but sometimes even their lives.
 
Thus, stricter regulation of the medical aesthetics industry is necessary, along with rigorous control over medical techniques, to promote healthy market development and provide strong consumer protection.