Fan Bingbing, the popular Chinese actress, is being investigated for alleged tax evasion. She was accused of signing fake contracts in order to hide her actual income.
The scandal prompted the Chinese tax authority to issue new rules that are meant to stop ‘money worship' and bogus contracts.
As per Variety, top government agencies including the tax authority, culture ministry and TV and film bureau stated that payments of actors cannot go over 40 percent of the total production cost - whether it is a film or a TV project. Also, the lead stars' pay must not exceed 70 percent of the total salary of the cast members.
Chinese officials believe that by setting a limit to celebrities' salary will discourage the degradation of social values within the entertainment industry. In the midst of the tax revisions, heated discussion regarding Fan Bingbing's alleged deliberate concealment of contracts and real salary figures ensues.
The famous Chinese actress was said to have avoided shelling out millions by declaring just a fraction of her total income. Additionally, it was reported that the 36-year-old star avoided paying a hefty tax for years now.
Reuters reported that China is determined to stop this illegal practice by immediately implementing the new rules. The officials are also hoping that the added regulations will shun unreasonable high pay rates in the entertainment industry.
In any case, Fan Bingbing's tax scandal started in May when TV presenter, Cui Yongyuan, released photos of what was believed to be images of the actress' employment contracts. In the post, one document shows a price of $1.56 million while another one has $7.8 million.
It was pointed out that the different amounts in the contracts are an example of what the Chinese called as "yin-yang contracts." In China, this is a method of tax evasion where the document with the smaller amount is declared to the authorities while the one with the higher value is hidden.
Cui published the photos on Weibo, a widely-used Chinese social media platform. His posts garnered more than 220,000 likes and Bingbing was heavily criticized for her supposed wrongdoing. In response to the backlash, the actress and her home studio denied the allegations, The Star Online reported.
The star's managing company further stated that they will be taking legal actions for violations to their artist's rights. At any rate, Fan Bingbing is the world's fifth highest paid actress in 2016 as listed by Forbes.
