Tax Compliance Non-Prosecution: Logical Foundations, Application Review, and Integrated Pathways—A Perspective from the Greater Bay Area in China

Abstract

Compliance non-prosecution serves as a criminal incentive mechanism aimed at encouraging private enterprises to strengthen internal management and prevent criminal conduct, representing a proactive response to modernizing crime governance centered on cooperative justice. As a significant economic engine, the Greater Bay Area in China would benefit from an integrated tax compliance criminal system to support tax compliance within enterprises involved in legal disputes, promoting their sustainable development. Given the unique characteristics of tax-related cases, the Greater Bay Area should establish a tax compliance criminal procedure led jointly by legal and prosecutorial authorities. This procedure should categorize cases by severity into discretionary non-prosecution and conditional non-prosecution, thus creating a unified standard that integrates governance and prevention in tax compliance rectification. Additionally, an interconnected tax compliance cooperation mechanism should be established within the Greater Bay Area. Such unified regulations on tax compliance non-prosecution would strengthen collaboration in tax enforcement, enhance the standardization, fairness, and transparency of criminal tax compliance procedures, and ultimately improve both enforcement efficiency and judicial authority.