After a comprehensive ban, Zheng Shuang was fined 299 million yuan. How much recklessness remains behind the celebrity halo?

[4] Compiled from: Red Star News
 
Case review
[2] In early April this year, the First Inspection Bureau of the Shanghai Municipal Tax Service lawfully accepted a report on Zheng Shuang's suspected tax evasion. Under the guidance and supervision of the State Taxation Administration, and with the assistance of tax authorities in Tianjin, Zhejiang, Jiangsu, and Beijing, a comprehensive and in-depth investigation was conducted into Zheng Shuang's use of "dual contracts" for suspected tax evasion, as well as tax-related issues concerning her performing projects and related enterprises and individuals after the 2018 regulation of the film and television industry's tax order.

 
 

[3] The investigation found that in 2019, Zheng Shuang starred in the TV series "A Chinese Ghost Story," agreeing with the producer on a fee of 160 million yuan, actually receiving 156 million yuan, without lawfully and truthfully filing tax returns, evading 43.027 million yuan in taxes, and underpaying 16.1778 million yuan in other taxes. It was also found that Zheng Shuang had other performance income of 35.07 million yuan, evading 2.2426 million yuan in taxes, and underpaying 10.3429 million yuan in other taxes. In total, from 2019 to 2020, Zheng Shuang failed to lawfully declare personal income of 191 million yuan, evading 45.2696 million yuan in taxes, and underpaying 26.5207 million yuan in other taxes.
 
[4] Zheng Shuang's actions violated repeated prohibitions since 2018 by the Central Propaganda Department, the Ministry of Culture and Tourism, the State Taxation Administration, the National Radio and Television Administration, and the National Film Bureau against "sky-high fees" and "dual contracts" in the film and television industry. Her intentional tax evasion was evident, severely disrupting tax collection and management order, and violating relevant tax laws and regulations. The tax authorities imposed strict penalties in accordance with the law.
 
 
Relevant Laws
Individual Income Tax Law
Article 2The following categories of personal income shall be subject to individual income tax:
(1) income from wages and salaries;
(2) income from remuneration for personal services;
(3) income from author's remuneration;
(4) income from royalties;
(5) Income from business operations;
(6) Income from interest, dividends, and bonuses;
(7) Income from property leasing;
(8) Income from property transfer;
(9) Incidental income.
 
Article 10In any of the following circumstances, taxpayers shall file tax returns in accordance with the law:
(1) Obtaining comprehensive income and needing to file a final settlement;
(2) Obtaining taxable income without a withholding agent;
(3) Obtaining taxable income where the withholding agent fails to withhold tax;
(4) Obtaining income from overseas;
(5) Canceling Chinese household registration due to emigration;
(6) Non-resident individuals obtaining wages and salaries from two or more sources within China.
(7) Other circumstances stipulated by the State Council.
Withholding agents shall handle full-amount and full-person withholding declarations in accordance with state regulations and provide taxpayers with information such as their personal income and taxes already withheld.
 
Article 11For comprehensive income obtained by resident individuals, individual income tax is calculated on an annual basis; if there is a withholding agent, the withholding agent shall withhold and prepay taxes on a monthly or per-occurrence basis; if a final settlement is required, it shall be handled between March 1 and June 30 of the following year after obtaining the income. The measures for prepayment and withholding shall be formulated by the tax authorities under the State Council.
If a resident individual provides special additional deduction information to the withholding agent, the withholding agent shall make deductions in accordance with regulations when withholding and prepaying taxes on a monthly basis and shall not refuse.
For non-resident individuals obtaining income from wages and salaries, remuneration for labor services, author’s remuneration, and royalties, if there is a withholding agent, the withholding agent shall withhold and pay taxes on a monthly or per-occurrence basis, and no final settlement is required.
 
The Tax Collection and Administration Law
Article 32If a taxpayer fails to pay tax within the prescribed time limit, or a withholding agent fails to remit tax within the prescribed time limit, the tax authorities shall, in addition to ordering compliance within a specified period, impose a surcharge of 0.05% per day on the overdue tax from the date the tax becomes overdue.
 
Article 64If a taxpayer or withholding agent fabricates false tax bases, the tax authorities shall order correction within a specified period and impose a fine of not more than 50,000 yuan.
If a taxpayer fails to file a tax return and fails to pay or underpays the tax payable, the tax authorities shall recover the unpaid or underpaid tax and surcharges, and impose a fine of not less than 50% but not more than five times the unpaid or underpaid tax.

 
 

[1] The author's perspective
In fact, the issue of tax evasion by celebrities has always existed both domestically and internationally. As early as 1989, singer Mao Amin was reported to have evaded nearly 40,000 yuan in taxes during a five-day performance in Heilongjiang. This was no small amount at the time and sparked strong public attention. The then 26-year-old Mao Amin was fined over 600,000 yuan and faced other penalties. As a post-90s celebrity, even if Zheng Shuang was unaware of Mao Amin's case, she should have learned the heavy lesson from Fan Bingbing's 2018 tax-related fine of 884 million yuan.
 
Celebrities already have high incomes, so they should set a good example and lead by example. Although high incomes come with higher taxes, this is a due obligation. Previously, netizens jokingly referred to Zheng Shuang's 160 million yuan remuneration as a unit of measurement—"one Shuang." Now that the case has been settled, it is hoped that everyone will remember another "Shuang value": 299 million yuan. This is a landmark event and serves as a wake-up call for all taxpayers.