High-profile celebrities fined for tax evasion

0 Comment(s)Print E-mail China Daily, September 18, 2023
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Taxation authorities have pledged to step up supervision on the entertainment industry after a popular actress and an internet influencer were hit with heavy fines for tax evasion.

Yuan Bingyan, a film and television actress who graduated from the prestigious Shanghai Theatre Academy, was fined almost 3 million yuan ($412,400) by tax authorities in Chongqing, where her company Chongqing Liyan Culture Media Co is registered, according to a statement on the State Taxation Administration's website.

The 31-year-old's fines were for tax evasion and other penalties, including overdue tax payments.

Chongqing Liyan Culture Media Co was separately ordered to pay a 1.32 million yuan fine for unpaid taxes and other penalties. All the fines have been paid, according to the administration's statement.

Last year, local taxation authorities imposed a 978,000-yuan fine on Chongqing Liyan Culture Media Co for tax-related misconduct.

Suspecting tax fraud, local tax authorities reminded Yuan, who held a controlling interest in the company, of their doubts and urged her to rectify the situation. However, Yuan failed to fully report her wrongdoings, prompting authorities to launch a formal investigation.

The probe revealed that Yuan did not declare part of her income, and illegally presented her personal spending as corporate expenditure. The practices reduced the amount of both personal and corporate taxes, the statement said.

"The tax department will continue to strengthen tax supervision in the field of culture and entertainment, strictly investigate and punish tax-related violations in accordance with the law, constantly improve the tax law compliance of employees and enterprises in the field, and create a fair tax (system)," it said.

Meanwhile, "gossip" livestreamer Wu Chuan was forced to repay a total of 13.6 million yuan, the taxation administration said in a separate statement.

Wu, whose broadcasts on short-video platform Douyu can attract as many as 600,000 viewers, had dodged tax and resisted investigation.

Better known on the platform by his alias "Soul Knife God", he evaded 8.27 million yuan in personal income tax between 2018 and 2021 through methods such as concealing earnings or fabricating the nature of some of his income, it said.

According to the statement, tax authorities in the Guangxi Zhuang autonomous region, where Wu is based, initially reached out to the host and asked him to fix his mistakes. However, Wu refused to cooperate, triggering a full inspection.

Taxation authorities said they will continue to strengthen supervision on livestream hosts, seriously investigate and punish tax-related illegal acts in accordance with the law, and promote the development and standardization of the industry.

The pair are among a growing cohort of wealthy entertainers who have faced steep fines over income tax evasion in recent years as China works to combat unreasonably high incomes as part of the national drive to promote common prosperity.

In a high-profile case in 2018, Fan Bingbing, a top actress with 63 million followers on microblogging platform Sina Weibo, was fined a mammoth 800 million yuan for dodging up to 255 million yuan in personal and corporate taxes. Following the announcement of the fine, Fan made a public apology and said she would overcome all difficulties and pay the fine.

On Saturday, People.cn, a news website controlled by People's Daily newspaper, published a commentary warning that those who work in entertainment should strictly comply with the tax law and never harbor ideas of tax evasion.

"Celebrities should take the lead in complying with the law and take the initiative to assume social responsibility," it said. "Unfortunately, some repeatedly evade tax and ignore the legal constraints, and ultimately suffer the consequences," it said.

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