Hot spot · analysis

Analysis and Reflection on the Penalty of Stars and Broadcasters for Tax Evasion

1、 Hot spot of current affairs

Recently, there have been an endless stream of tax related cases involving celebrities and anchors. The tax authorities have repeatedly taken action, and a number of popular stars and well-known anchors have received huge fines. The skyrocketing remuneration and tax issues of celebrities and anchors have once again touched the public bottom line, causing a shock in the field of film and television entertainment and the online live broadcasting industry.

2、 Legal Analysis

According to Article 63 of the Law of the People's Republic of China on the Administration of Tax Collection: "A taxpayer who forges, alters, conceals, or destroys account books or accounting vouchers without authorization, or overstates expenses or omits or understates income on the account books, or refuses to declare or makes false tax returns after being notified by the tax authorities to do so, and fails to pay or underpays the tax payable, is guilty of tax evasion. If a taxpayer evades tax, the tax authorities shall pursue the payment of the tax he fails to pay or underpays, as well as the late payment fine, and impose a penalty of one percent of the tax he fails to pay or underpays A fine of not less than fifty times but not more than five times; "If a crime is constituted, criminal responsibility shall be investigated according to law."

As we all know, various types of tax violations are very common in the field of film, television, entertainment, and online live streaming. Why do we also pay taxes after tax evasion? Some people pass the customs safely, while others are punished and exposed?

This has to mention the "Notice on Further Regulating the Tax Order in the Film and Television Industry" issued by the State Administration of Taxation on October 2, 2018, "As of October 10, 2018, local tax authorities have notified companies such as film and television production companies, brokerage companies, entertainment companies, star studios, and high-income employees in the film and television industry in their respective regions to conduct self inspection and self correction of their tax returns since 2016. Those film and television companies and employees who have conscientiously conducted self inspection and self correction and actively paid taxes before the end of December 2018 will be exempt from administrative penalties and will not be fined."

In addition, in September 2021, the General Office of the State Administration of Taxation issued a Notice on Strengthening the Tax Management of Employees in the Cultural and Entertainment Industry, The notice states: "Regular tax risk analysis should be carried out. In the near future, in combination with the handling of the final settlement and payment of personal income tax in 2020, star entertainers and online anchors with tax related risks should be given one-on-one risk tips and urged to rectify. Those who can actively report and timely correct tax related issues before the end of 2021 can be given a lighter, mitigated, or exempted punishment according to law. Those who refuse to cooperate with the tax authorities in investigating, verifying, and urging the rectification work should be ordered to do so according to law Restrict changes and request assistance from industry authorities and industry associations to urge correction; "If the circumstances are serious, it shall be investigated and dealt with seriously according to law."

It has been found in the industry that there have been significant changes in the administrative law enforcement procedures for tax related violations in China's tax authorities. Originally, the tax authorities' inspection was to investigate and handle immediately, but now they have introduced the "five step work method": prompt and remind - urge rectification - interview and warning - file a case for inspection - publicly expose.

The "Five Step Work Method", a collection and management measure, provides a space for taxpayers who violate tax laws to "self inspect and self correct". For example, network anchor Li Moumou passed the customs safely, it should be when receiving a reminder from the tax authorities, recognizing his mistake, and actively cooperating in the first three steps of the five-step work method to make up the relevant taxes. The anchor, Huang Mou, had a fluke mentality towards the tax authorities' early warning warning, which ultimately led the tax authorities to enter the process of filing for inspection and public exposure.

According to the disclosure content of several recent star and anchor tax related cases, the "Five Step Work Method" has also played an important role. Based on the clues in tax regulation and further analysis of tax big data, the tax department found that the star anchor was suspected of tax evasion. Therefore, it first prompted and then urged for rectification and appointment warnings. After being reminded and urged, the rectification was still incomplete, and then it was filed for inspection and publicly exposed in accordance with the law and regulations.

Industry · New Deal

"Opinions on Promoting the Standardized and Healthy Development of Film and Television Bases"

On February 21, six ministries and commissions, including the National Film Administration, the National Development and Reform Commission, the Ministry of Natural Resources, the Ministry of Ecological Environment, the Ministry of Housing and Urban-Rural Development, and the State Administration of Radio and Television, issued the Opinions on Promoting the Standardized and Healthy Development of Film and Television Bases. The Opinion points out that in recent years, a number of film and television bases have been invested and constructed in various regions, which have played an important role in improving the creative production level, improving the industrial system, and strengthening the industrial strength of the film and television industry. At the same time, there have also been blind development, low-level repetitive construction, and even taking advantage of opportunities to engage in real estate development. The release of the Opinions aims to promote the standardized and healthy development of film and television bases.
The Opinions propose nine major tasks, emphasizing the need to accurately define the scope, implement the ideological work responsibility system, rationally plan and layout, cohesively develop the main industry, improve the content of science and technology, strengthen demonstration and guidance, strictly control real estate development, strictly manage land use, and strictly adhere to the red line of ecological protection. Requirements: All film and television bases shall not receive filming activities such as movies, TV dramas, online movies, and online dramas that have not been approved or recorded by the film and television authorities, and shall not provide filming and production services to relevant crews in any form; Strictly control the proposed new film and television base projects to prevent the phenomenon of "fake film and television base real estate".

2. The tax department will continue to strengthen tax supervision on employees in the field of cultural and entertainment

On March 15, the Shanghai Taxation Bureau announced that the Fourth Inspection Bureau of the Shanghai Municipal Taxation Bureau will handle the case of Deng Lun's tax evasion according to law, The circular also stated that "the relevant person in charge of the Fourth Inspection Bureau of the Shanghai Municipal Taxation Bureau stated that the tax department will continue to strengthen tax supervision on employees in the field of cultural and entertainment, and conduct joint inspections on relevant brokerage companies, brokers, intermediary agencies, etc. that assist in tax evasion, strictly investigate and deal with tax related violations in accordance with the law, continuously improve the tax compliance of employees and enterprises in the field of cultural and entertainment, and further create a legal and fair tax environment."

The "Qinglang" series of special actions in 2022 include 10 key tasks

On March 17, the Information Office of the State Council held a press conference on the 2022 "Qinglang" series of special actions, with Sheng Ronghua, Deputy Director of the National Cyber Information Office, attending the conference to introduce the situation of the 2022 "Qinglang" series of special actions, which specifically included 10 key tasks: combating online rumors, rectifying the chaos of information content in MCN institutions, rectifying the chaos of online live broadcasting and short video fields, rectifying the chaos of application information services, and standardizing the communication order, Algorithmic comprehensive management, improving the network environment during the Spring Festival, and improving the network environment of minors during the summer vacation.