China Cracks Down on Entertainment Industry Taxes After Fan Bingbing Scandal

China’s entertainment companies and top-earning celebrities have been warned to re-examine their taxes dating back to 2016 in light of the Fan Bingbing tax evasion scandal.

The State Administration of Taxation said in a statement released on Monday that beginning on Oct. 10, provincial tax authorities will inform local film and television production companies, talent management agencies, performance companies, studios of individual celebrities, as well as relevant companies and high-earning film and television industry practitioners about the re-examination of their tax returns submitted since 2016. Companies and related industry workers who discover and pay their unpaid taxes upon self-conducted inquiry of their previous tax returns by Dec. 31 will not be penalized, the statement said.

From January to the end of February 2019, tax authorities will target certain companies and industry workers to “further self-correct” their taxes based on their self-conducted re-examination results. Those who are warned to self-correct their taxes at this stage will be penalized, but the level of punishment will vary depending on the situation. Heavy penalties will be applied to those who fail to comply between March and June next year.

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