Fan Bingbing's Big Fine

Actress Fan Bingbing must pay a hefty fine for tax evasion

The big news today is that finally after months of no word from actress Fan Bingbing, it has now been revealed that she has been fined nearly 884 million yuan (US$129 million) for tax evasion.

In the office we were speculating if she could even pay that amount.

According to Forbes she made 300 million yuan from July 2016-July 2017, and 1.4 billion yuan between 2003 and 2016. But surely she spent a chunk of that money. She will probably be cleaned out after paying the fine and will have to lay low for a while before re-starting her career again.

She was an ambassador for Louis Vuitton

It's unfortunate she was singled out as an example of what happens if you evade paying your taxes.

It was found that she had two contracts, one at a lower amount to pay less taxes, and another that was her actual income. Her production companies were also fined 117 million yuan for also omitting income and not paying tax on it.

Apparently Fan will escape criminal charges if she pays the hefty bill by December 31.

While she was invited by several luxury brands like Louis Vuitton, De Beers, Montblanc, and Guerlain to be an ambassador, probably no money or not much changed hands, but now it'll make fashion, jewellery and cosmetic brands think twice about using Chinese artists as brand ambassadors.

It puts these companies in a tough position because they want to target mainland Chinese consumers, but don't want to be caught using the wrong celebrity for promotional purposes.

The whole fiasco started in May, when outspoken state television presenter, Cui Yongyuan posted pictures on Weibo of two contracts that appeared to be for Fan's upcoming film. One showed a salary of US$1.6 million to be reported to the tax authorities, and another with US$7.8 million.

This is a common practice called yin-yang contracts. It is also not unusual for companies to have two books, one for the tax department to look at, the other containing actual figures.

Fan also promoted De Beers

After there was public outcry about his whistle-blowing, Cui later apologized to Fan and in June he withdrew his claims altogether. But that didn't stop the State Administration of Taxation from launching an investigation, which led to her disappearance the same month.

Fan was held under "residential surveillance at a designated location", where the police can detain anyone suspected of endangering state security, terrorism, or significant corruption at an undisclosed location for up to six months. It is a practice widely condemned by human rights groups.

Today Fan released a letter apologizing to fans and the Communist Party for her transgressions, saying she would "overcome all difficulties" to pay what she owed.

"One could say that every bit of the achievement I have made cannot be separated from the support of the state and the people," she wrote. "Without the good policies of the Communist Party and the state, without the people's love and care, there would be no Fan Bingbing."

Who knows what she went through when she was in detention for several months. Regardless of what people think of her, we can only hope she will get through this terrible period and eventually move on.