As China’s Culture Ministry pushes for stricter regulations of entertainment industry, the tax administration of celebrities including actors and internet influencers is further strengthened.
The State Taxation Administration issued a notice and required celebrities to pay up taxes by self-examination and self-correction before the end of 2021.
The notice pointed out that the tax examination should be carried out regularly. For those celebrities with tax-related risks, there will be one-to-one risk reminders to rectify based on the situation of individual income tax settlement and payment in 2020.
Those who voluntarily report and promptly rectify tax-related problems before the end of 2021 may be given lighter, mitigated, or exempted from punishment in accordance with the law.
Anyone who refuses to cooperate with the tax authorities’ investigation and verification and supervision of rectification shall be ordered to rectify their behaviors in accordance with the law, and the industry competent authorities and industry associations shall be asked to assist in the supervision and correction; if the circumstances are serious, they shall be investigated and dealt with strictly in accordance with the law.
In the past, in order to attract investment and play a star effect, some places have loosely regulated the enjoyment of preferential tax policies in the entertainment industry, and even introduced some illegal “local policies” such as tax refunds.
Many celebrities set up shell companies in tax havens such as Khorgos in northwest China’s Xinjiang thus enjoying tax incentives and financial rebates in disguise. In the future, supervision in this area will continue to be strengthened, as will compliance with the principle of substantive operation, and the review process will be more stringent, so as to prevent the shell companies established by celebrities from enjoying preferential policies that should not be obtained.
Original posted at news.cgtn.com