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Fan Bingbing Contract Leak Sparks Film Industry Tax Probe in China

China’s tax authorities have launched a probe into the fiscal affairs of the film and TV industries, following allegations that leading actress Fan Bingbing engaged in contract chicanery to hide a massive payday.

China’s State Authority of Taxation announced the industry-wide move Sunday. It ordered local tax bureaus to investigate so-called Yin-Yang contracts – in essence, double contracts for the same work.

Fan, China’s biggest celebrity and co-star of Jessica Chastain’s forthcoming action film “355,” reacted furiously last week when details of a contract were leaked online by TV anchor Cui Yongyuan. His initial disclosure showed Fan being paid $1.56 million (RMB10 million) for four days’ work on Feng Xiaogang-directed “Cell Phone 2.” Cui followed up by releasing a second contract worth $7.8 million (RMB50 million) for the same work. He suggested that the intent was to allow Fan to declare only the smaller contract to tax authorities, rather than her full $9.3 million (RMB60 million) compensation.

Fan has denied any impropriety and hired lawyers to defend her. Cui’s social media posting was viewed 38 million times before being removed on Sunday, state-owned Global Times reported.

The disclosure was an embarrassment for both Fan and for China’s media regulators. Last year, five government agencies issued directives urging media companies to focus on culture rather than celebrity, and moved to rein in runaway paydays for stars. As part of last year’s supposed crackdown, the China Alliance of Radio Film and Television issued guidelines that sought to limit on-screen performers’ pay to 40% of a production’s total cost. It also sought to cap the leading star’s pay at a maximum of 70% of total payments to cast. The Yin-Yang contracts appear to be a way to skirt those rules.

Cui’s leak also revealed a string of diva-like riders and conditions. They included Fan having script approval, two limousines, a voice coach, a makeup artist who needed to be paid for a full month at $12,500 (RMB80,000,) and a $235 (RMB1,500) food allowance per day.

Fan, who was a member of the main competition jury at last year’s Cannes Film Festival, rose to fame in Feng’s “Cell Phone” in 2003 and, according to some estimates, is the world’s fourth-highest-paid actor. She runs her own company, Fans Workshop, and for the past four years she has been China’s highest-paid actress, according to Forbes. The Financial Times reported that last year Fan earned $46.5 million (RMB300 million), with much of that total coming from sponsorship and celebrity endorsements.

Represented in Hollywood by CAA, Fan has appeared in “X-Men: Days of Future Past” and “Iron Man 3.” She appeared in Feng’s hit “I Am Not Madame Bovary” in 2016 and will be seen next in Chinese war film “The Bombing.” She has recently posted pictures of herself in makeup preparing to shoot “Cell Phone 2.”

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