Chinese celebrities pay $2.3 billion in back taxes after Fan Bingbing scandal

PHOTO: The Star/ Asia News Network

LOS ANGELES - Chinese film and TV stars have paid some $1.7 billion (S$2.3 billion) of additional taxes, following the mid-2018 scandal surrounding actress Fan Bingbing. The figure was announced Tuesday by China's State Tax Administration.

Chinese authorities launched a probe into the taxation affairs of the entertainment sector in October. Companies and individuals were asked to examine and self correct their post-2016 tax affairs, by the end of December last year. Those that complied would be exempt from further penalties for tax evasion, the Tax Administration said.

In July last year, Fan was accused of hiding a proportion of her income on a film production through use of multiple contracts, only some of which would be declared to the tax authorities. It also emerged that she had set up companies in the regions in order to made use of lower tax regimes offered by some of China's provinces.

In October, after going missing from public view for months, Fan resurfaced. She apologised and was ordered to pay $130 million of back taxes and penalties on behalf of herself and her companies.

The huge scale of the other celebrities' unpaid tax bill - the number equates to roughly 20 per cent of China's gross box office last year - reinforces the argument that the use double contracts and tax loopholes was widespread throughout the Chinese entertainment industry. The number of productions initiated in China slowed sharply from the summer as production companies and talent reassessed their financial relationships.

"Industry workers should practise socialist core values ... and strive to be entertainment workers with belief, empathy and sense of responsibility in the new era," authorities said, according to state news agency Xinhua.

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