Film industry accusation sets off tax-evasion investigation

Authorities have begun an investigation of rumored tax evasion in the film and television industry, and the State Administration of Taxation said in a statement released on Sunday that any illegal activity uncovered would be punished in accordance with the law.

The statement comes after a recent furor online that a Chinese film actor may have evaded taxes by reporting only a fraction of total earnings from a film deal.

Former TV host Cui Yongyuan released screenshots of a document in a Weibo post on Friday that appeared to be an actor’s employment contract.

On Tuesday, Cui accused an actor of signing two contracts for a single production. The first contract stated payment of 10 million yuan ($1.58 million), the second spoke of a payment of 50 million yuan.

Without mentioning any actor by name, Cui said: “Why so sneaky when taking the 50 million? What are you afraid of ? After taking the 60 million yuan, this bro only acted on set for ... four days.”

The documents Cui posted online named the film star Fan Bingbing. On Sunday night, Fan’s studio told media she and the studio have never signed double contracts and they will cooperate with any investigation.

The State Administration of Taxation said measures would be taken to prevent any such incident from occurring.

An investigation has begun in Wuxi, Jiangsu province, the local tax authorities said, and any measures taken will depend on the probe’s results.

Cai Daotong, director of the Law School of Nanjing Normal University, said the tax authority has an obligation to investigate whether illegal activities occur regarding income reporting. “It might be a single case, or a broad hidden rule in the film and television industry.”

If it has been proved, the tax authority has the duty to pursue the tax payment and to issue a fine for delaying payment. The case could be sent to police for further investigation if the parties concerned are suspected of crimes, said Cai.