You may not have heard of Fan Bingbing, but she is China’s most famous actress. She has also appeared in American films such as “X-Men: Days of Future Past” and “Air Strike”. This worldwide celebrity is the latest to get caught “cooking the books”.
Income Tax in China
China’s current tax bracket breakdown can be seen below:
| Monthly taxable income (CNY*) (1) | Net income (2) | Tax rate (%) | Quick deduction (CNY) |
|---|---|---|---|
| Grossed income | |||
| 0 to 1,500 | 0 to 1,455 | 3 | 0 |
| Over 1,500 to 4,500 | Over 1,455 to 4,155 | 10 | 105 |
| Over 4,500 to 9,000 | Over 4,155 to 7,755 | 20 | 555 |
| Over 9,000 to 35,000 | Over 7,755 to 27,255 | 25 | 1,005 |
| Over 35,000 to 55,000 | Over 27,255 to 41,255 | 30 | 2,755 |
| Over 55,000 to 80,000 | Over 41,255 to 57,505 | 35 | 5,505 |
| Over 80,000 | Over 57,505 | 45 | 13,505 |
Fan Binging has a net worth of over $100 million (USD) so we are assuming she is in the 45% tax bracket. 80,000 (CYN) is equivalent to about $11,500 (USD) per month. She would be in the 28% bracket in the United States.
Accusation of Tax Fraud
The Chinese government is accusing Fan Bingbing of purposefully dodging taxes. Specifically,
- She only paid taxes on $1.1 million (USD) of the $7.5 million (USD) contract for her role in Air Strike.
- Fan’s companies evaded $36 million (USD) in taxes.
The Chinese government has not released more details just yet.
Penalties
The Chinese government does not mess around when it comes to tax evasion. While they are not demanding jail time since this is Fan’s first criminal conviction, she will have to:
- Personally, pay $70 million (USD) in taxes and fees.
- Her companies must pay about $60 million (USD) in taxes and fees.
The total owed in taxes and fees: $130 million (USD). Compare that to some of the famous tax evasion fines for American celebrities:
- Wesley Snipes – $7 million
- Nicolas Cage – About $12 million
- Willy Nelson – About $16 million
In response to the judgement, Fan released an apology, “I’m ashamed of my behavior and I apologize here to everyone.” Also, “Every bit of my achievement is inseparable from the support of the state and the people. Without the good policies of the Communist Party and the state, without the love of the people, there is no Fan Bingbing.”
Tax lax is complicated. You do not have to be a celebrity to have tax problems. If you find yourself under the scrutiny of the IRS, you need help. Elias Dsouza has been defending people with tax problems for over 15 years. Contact Dsouza Legal Group for a free consultation.
