China's taxation authorities review tax affairs of celebrities

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The State Administration of Taxation of China urged the tax bureau in Wuxi, east China's Jiangsu Province, to investigate tax-related issues of the contracts of film and television practitioners on Sunday.

Some of the country’s most famous actors have been accused of signing so called “yin-yang” contracts – one contract setting out agreed payment terms and a second one with a lower figure for the tax authorities to avoid payment of tax, which has been widely discussed by Chinese netizen’s over Sina Weibo.

The purpose of signing two contracts was to evade tax, according to Legal Daily.

According to the Article 201 of China’s Criminal Law, taxpayers found guilty of evading taxes exceeding 10 percent but less than 30 percent of payable taxes, or evading taxes again after two administrative sanctions for tax evasion, shall be punished with imprisonment or criminal detention of less than three years, with a fine of over 100 percent but less than 500 percent of the evaded tax amount.

For cases with evaded tax amount exceeding 30 percent of payable taxes, or exceeding 100,000 yuan, punishment shall include imprisonment of over three years but less than seven years, with a fine of over 100 percent but less than 500 percent of the evaded tax amount.

China’s cinema market is worth $8.6 billion. An index tracking major media firms dropped 1.3 percent to a near four-year low on Monday.

The State Administration of Taxation of China has urged the tax bureau in east China's Jiangsu Province to investigate the tax-related issues of the contracts of film and television practitioners. /Screenshot from the official website of the State Administration of Taxation

The State Administration of Taxation (SAT) has asked the local bureau in the eastern province of Jiangsu, among others, to carry out investigations.

“If violations of tax laws and rules are found, they will be dealt with in accordance with the law,” said the SAT.