Actress Fan fined for tax evasion

Actress Fan Bingbing has been ordered to pay hundreds of millions of yuan in taxes and fines because of tax evasion, tax authorities announced on Wednesday.

The State Taxation Administration and its Jiangsu Provincial Tax Service said they started investigating Fan in early June after receiving information from members of the public accusing the internationally known actress of evading taxes through contract fraud.

Investigators found that she had evaded paying about 7.3 million yuan ($1.07 million) in personal income tax and business taxes during her work on the Chinese film The Bombing.

Investigators found that Fan and companies of which she is the legal representative have tax arrears amounting to 248 million yuan, of which 134 million yuan had been illegally evaded.

The penalties, made in accordance with Chinese law, were:

• Fan and the companies must pay 255 million yuan in taxes plus 33 million yuan in a late payment surcharge;

• Fan must pay a fine of 240 million yuan for concealing real income through acts of contract fraud and an additional fine of 239 million yuan for using her studio’s accounts to hide personal income;

• The companies must pay a 946,000 yuan fine for omitting income from accounting books to evade taxes;

• One company must pay 51 million yuan for failing to pay personal income taxes on behalf of Fan, and another must pay 65 million yuan for providing illicit assistance in evading taxes.

Taxation officers in Jiangsu formally issued the penalty to Fan on Sunday.

Fan, who received an

administrative penalty due to first-offense tax evasion and has never been subject to any criminal punishment for tax evasion, will not be criminally prosecuted if she repays the taxes and fines within a defined time period.

The case, however, will be transferred to police if she does not comply.

Taxation authorities said that Fan’s agent, surnamed Mou, obstructed their investigation by instigating employees to hide and deliberately destroy accounting materials of the companies involved. Suspected of them committing criminal offenses, police investigating the case have restricted the freedom of movement of Mou and others involved.

The State Taxation Administration has ordered its Jiangsu Provincial Tax Service to punish taxation officers who were held accountable for the tax evasion.

The authorities said other film and TV companies and related personnel that undergo self-examination and make remedial payments to taxation authorities before Dec 31 will be exempt from administrative punishment and penalties.

Fan Bingbing