The value-added business tax in Taiwan features with convenient tax audit and without double taxation. A company could reduce its payable annual income tax by take off the expenses of business transactions. For example: the invoices of the spending of business machines for producing goods could be used to reduce the income tax of a company. However, there is a possible fraud of income tax caused by the invoices. A criminal gang could form fictitious company to sell invoices without payment. The buyer of the invoices without business transactions could use purchased invoices to reduce the income tax. That is harmful for national incomes. Unfortunately, such crimes could not be detected through the convenient tax audit. Therefore, avoiding the fraud action affecting the annual national income and social development, the research of finding characteristics of the fictitious company issued invoices without business transactions is needed. In this study, the characteristics of the fictitious companies are analyzed from surveying the experts of taxation in Taiwan. The results show that the buyers could be the sellers of invoices are positive related to the tax fraud significant. Additionally, the report of criminal case is also important to be discussed.
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