After being completely banned, Zheng Shuang was fined 299 million yuan. How much more recklessness lies behind the star halo?

[4] Compiled from: Red Star News
 
Case review
In early April this year, after the First Inspection Bureau of the Shanghai Municipal Tax Service accepted a report of suspected tax evasion by Zheng Shuang in accordance with the law, under the guidance and supervision of the State Taxation Administration and with the cooperation and assistance of tax authorities in Tianjin, Zhejiang, Jiangsu, Beijing and other places, a comprehensive and in-depth investigation was carried out into Zheng Shuang’s suspected tax evasion through the use of “yin-yang contracts,” as well as tax-related issues involving performance projects Zheng Shuang participated in and relevant enterprises and personnel after the regulation of tax order in the film and television industry in 2018.

 
 

Investigation revealed that Zheng Shuang starred in the TV drama "A Chinese Ghost Story" in 2019, with an agreed remuneration of 160 million yuan and actual receipt of 156 million yuan. She failed to truthfully file tax returns in accordance with the law, 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 entertainment 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 declare personal income of 191 million yuan in accordance with the law, evaded 45.2696 million yuan in taxes, and underpaid 26.5207 million yuan in other taxes.
 
Zheng Shuang's aforementioned actions violated the repeated requirements of the Central Propaganda Department, the Ministry of Culture and Tourism, the State Taxation Administration, the National Radio and Television Administration, the China Film Administration and other departments since 2018, which strictly prohibited "exorbitant remuneration" and "yin-yang contracts" in the film and television industry. Her subjective intent to evade taxes was evident, severely disrupting the order of tax collection and administration and violating relevant tax laws and regulations. The tax authorities handled the matter strictly 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
The issue of tax evasion by celebrities and artists has long persisted, both in China and abroad. As early as 1989, singer Mao Amin was exposed for evading nearly 40,000 yuan in taxes during a five-day performance in Heilongjiang. That was no small sum at the time and sparked intense public attention. Mao Amin, then 26 years old, was fined over 600,000 yuan and subjected to other penalties. Even if Zheng Shuang, as a member of the post-90s generation, was unaware of Mao Amin’s case, she should have learned a sobering lesson from Fan Bingbing, who was fined 884 million yuan in 2018 for tax-related violations.
 
Celebrities already earn high incomes, so they should set a better example and lead by example. Although high incomes mean higher taxes, paying taxes is an obligation they must fulfill. Previously, netizens jokingly referred to Zheng Shuang’s 160 million yuan acting fee as a unit of measurement—“one Shuang.” Now that the case has been settled, I hope everyone will also remember another “Shuang value”: 299 million yuan. This is a landmark event and a wake-up call for taxpayers at large.