Celebrities and social media stars face regular tax inquiries

A crowd of fans cheer for pop star Deng Lun during a promotional activity for the brand at a shopping mall in Chengdu, Sichuan province on September 27, 2018. [Photo/IC]

China is set to conduct regular tax inquiries on artists, with the aim of promoting a healthy environment in the entertainment industry, according to a notice issued by the State Tax Administration on September 18.

Celebrities and online influencers are required to set up tax accounts for their studios or businesses by law, and to have their tax returns and payments audited and verified by the authorities.

The administration will help studios and artist-owned businesses establish an accounting system that meets regulatory standards.

On September 16, the Beijing Municipal Radio and Television Bureau also issued guidelines on regulating very high celebrity salaries and strengthening management of the television drama industry.

In May, Chinese actress Zheng Shuang was reportedly paid 160 million yuan ($ 24.6 million) for 77 days of filming for her role in A Chinese Ghost Story, a television series adapted from a collection of supernatural stories. set in ancient China. His huge salary quickly sparked outrage on Chinese social media.

The guidelines also specify that actors’ salaries should not exceed 40 percent of production costs for film and television work.

According to an article in the Beijing Daily, the bureau verified the production costs of 48 television series, in particular payments made to actors and actresses.

The guidelines highlight the yin-yang contracts, which are named after two different parties, one public and the other under the table, which have been an open secret in China’s film and television industry since. years.

Some celebrities have escaped tax by benefiting from dual pay schemes, which has prompted the regulator to take action. In August, Zheng was ordered to pay 299 million yuan in unpaid taxes, overdue fees and fines, while in 2018, Chinese actress Fan Bingbing was ordered to pay 883 million yuan to cover back taxes and fines.

According to a Voice of China radio show, 660 artist agency companies had been closed by the end of August. Celebrity-owned and talent-affiliated businesses have long been viewed as channels used for tax evasion and fraud.

The report says that by 2025, the total value of China’s performing arts industry will reach 67.9 billion yuan.

“Huge profits are one of the main reasons for tax evasion,” the report says.

The stars should use their influence wisely and not deceive the government, said Pan Yan, general secretary of the China Performing Arts Association.

“Celebrities should not use their businesses to escape their responsibilities, such as meeting their tax obligations. It is a fundamental obligation for any law-abiding citizen,” she said. “We hope that celebrities and their companies will respect the law and devote more energy to their art to promote the development of the industry and set a good example for the public.”

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