Chinese actress Fan Bingbing tells fans she is ‘ashamed, guilty’ as she gets US$129 million tax bill

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After months of rumour and speculation as to what might have come of her, China’s highest-paid actress Fan Bingbing was back centre stage on Wednesday with a grovelling apology to her fans and the Communist Party, and a colossal bill for overdue taxes and fines.

“Recently, I have experienced unprecedented pain and agony,” she wrote on Weibo, China’s equivalent of Twitter, where she has more than 62 million followers.

“I have undergone profound thought and reflection. I feel ashamed and guilty about what I have done, and I sincerely apologise to you all!”

Fan’s letter – her first public statement since June – came after China’s tax authorities ordered her to pay nearly 884 million yuan (US$129 million) in overdue taxes and fines, Xinhua reported on Wednesday.

The star was released from “residential surveillance at a designated location” – a form of secret detention – about two weeks ago and returned to Beijing as the tax authorities completed their investigation, sources with knowledge of the case told the South China Morning Post.

One said Fan had been kept in a “holiday resort” used to investigate officials, in a suburb of Wuxi in coastal Jiangsu province.

The sources disagreed, however, on what might happen next, with one saying the star would now face further questioning on related investigations, and the other saying her ordeal was over.

Fan, 37, who gained international fame after appearing in the X-Men and Iron Man film franchises, is the most famous and bankable star to be incriminated under a government crackdown launched in the summer on tax evasion among high-earning celebrities.

Her case is expected to serve as a clear warning to others in the entertainment industry about the consequences for those who fail to pay their tax bills, Xinhua said in a separate article.

In their investigation, the tax authorities found that Fan owed more than 255 million yuan in unpaid taxes, of which 200 million yuan was regarded as tax evasion, the first report said.

She and her companies were ordered to pay the unpaid taxes, and fined about 600 million yuan.

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In a breakdown of the tax bill and fines, Xinhua said that Fan would have to pay 33 million yuan as a surcharge to her overdue taxes of 255 million yuan.

She was also fined 240 million yuan for using spurious contracts to conceal her true income and 239 million yuan for using the accounts of her studio to hide her personal income. Her companies, meanwhile, were fined a combined 117 million yuan for offences ranging from omitting income from their books – so as not to pay tax on it – to providing illicit assistance in the act of tax evasion.

Despite the hefty penalties, Fan will not face criminal charges if she pays all the money by an undisclosed deadline as requested by the tax authorities, Xinhua said, citing a 2009 amendment to China’s criminal law.

The State Administration of Taxation, meanwhile, said that companies and individuals in the entertainment industry that voluntarily “rectify their behaviour” and pay previously evaded taxes before December 31 will be exempt from administrative punishment and fines.

In her apology, Fan said she fully accepted the punishment by the authorities and 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. Without the good policies of the Communist Party and the state, without the people’s love and care, there would be no Fan Bingbing,” she wrote.

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A familiar face on film and television, as well as serving as ambassador for several luxury brands, Fan earned 300 million yuan (US$43.5 million) last year, according to the 2017 Forbes China Celebrity List. The only Chinese celebrity who earned more than her was Hong Kong action star Jackie Chan, with an estimated 330 million yuan.

According to Forbes, Fan earned 1.4 billion yuan between 2003 and 2016.

In 2015, she was quoted as saying: “I don’t want to marry someone who’s rich. I am someone who’s rich.”

Her troubles began in May, when an outspoken presenter on state television, Cui Yongyuan, posted snapshots on Weibo of two contracts that appeared to be for a coming film of Fan’s. One showed a salary of US$1.6 million to be reported to the tax authorities, while the second appeared to show an actual payment of US$7.8 million – a prevalent tax-dodging practice known as yin-yang contracts.

Amid a public outcry ignited by his whistle-blowing, Cui later apologised to Fan and in June withdrew his claims altogether. That, however, did not stop the State Administration of Taxation from launching an investigation, which led to her disappearance.

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Her abrupt silence sparked a cascade of rumours and concerns, with many people questioning why an investigation into tax evasion was being handled in such a secretive manner.

Fan was held under “residential surveillance at a designated location”, a form of detention introduced into criminal law in 2012 that lets police detain anyone suspected of endangering state security, terrorism or significant corruption at an undisclosed location for up to six months.

Since its introduction, the detention has been regularly used to intern rights lawyers and activists and block their access to family members and legal counsel. The practice has been widely condemned by rights groups.

Fan’s detention was followed by a wide-reaching crackdown on tax evasion and offshore currency transfers among high-profile celebrities in the fields of entertainment and sports.

The investigations involved tax officials, the foreign exchange watchdog, financial crime investigators and regulators from the publishing, broadcasting and sports bureaus, sources told the Post earlier.

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The investigation found that Fan used yin-yang contracts when working on Unbreakable Spirit, the war film known outside China as Air Strike and also starring Bruce Willis. Of her actual payment of 30 million yuan, only a third was included in the contract that she presented to the tax bureau – enabling her to evade at least 6 million yuan of personal income tax, according to Xinhua.

Meanwhile, Fan’s agent has been detained by police for further investigation for allegedly hiding and destroying accounting records during an initial investigation in June, the report said.

Tax officials in Wuxi, a base for the country’s film and television industry near Shanghai where Fan has three movie studios, have also been implicated in the case, it said.

Additional reporting by Keegan Elmer

Full text of Fan Bingbing’s letter:

Letter of Apology

Recently, I have experienced unprecedented pain and agony, and I have undergone profound thought and reflection. I feel ashamed and guilty about what I have done, and I sincerely apologise to you all!

For a long time, I did not respect the relationship between the interests of the state, society, and myself, and used “split contracts” and other tax evasion methods in relation to the film Air Strike and others. I am deeply ashamed of this.

These days, through my cooperation with the tax authorities’ tax inspections of me and my company, I have been reflecting deeply: as a public figure, I should abide by the law and be a role model for society and the industry.

We should not lose self-discipline and succumb to lax management for economic interests and break the law. Here, I sincerely apologise to society, to the friends who care about me, to the public and to the national tax authorities.

I completely accept the series of decisions on penalties made in accordance with the law by the tax authorities in their investigation. I will try my best to overcome all difficulties, raise funds, pay taxes, and pay fines according to the final decision of the tax authorities.

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I have liked the arts from an early age, and I had the great opportunity to rise with a booming film industry. With the guidance of many of my seniors, and the love of my audience, I have made my own persistent effort, and with all these things I have made some small achievement in the performing arts.

As an actor, I am always proud of being able to showcase my country’s culture on the world stage, and I have spared no efforts to promote this. One could say that every bit of the achievement I have made cannot be separated from the support of the state and the people. Without the good policies of the Communist Party and the state, without the people’s love and care, there would be no Fan Bingbing.

Today, I am deeply disturbed by the mistakes I have made! I have failed the state’s cultivation of me, failed the trust society had in me, and failed the love of my fans! Here, I sincerely apologise once again to everyone! Please forgive me!

I believe, after going through this rectification, I will follow the rules, be orderly and responsible. While presenting good works to you all, I will also supervise the management of [my] companies, abide the law in company operations, be honest and trustworthy, and strive to be a cultured and good company that spreads positive energy to society!

Once again, I would like to sincerely say to society, to the fans who have always supported me, and to the friends and family who care for me: sorry!

Fan Bingbing

October 3, 2018

This article Chinese actress Fan Bingbing tells fans she is ‘ashamed, guilty’ as she gets US$129 million tax bill first appeared on South China Morning Post

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