×

FilMart: Hong Kong Industry Executives Plead for Clarity on Mainland Chinese Tax Policies

At a time of heightened scrutiny of tax affairs in China’s entertainment sector, even industry veterans in Hong Kong are struggling to figure out how to operate in the new financial environment and pleading for more clarity from the Chinese government.

Hong Kong produces about 60 films a year, three-quarters of which are typically co-productions with the mainland. The Chinese film industry’s overhaul of its tax policies last year in the wake of a fraud scandal involving superstar Fan Bingbing has sown confusion in both the mainland and Hong Kong, which operates as a special administrative region with its own financial regulations.

During a discussion of mainland taxation issues Tuesday at FilMart, some panelists said that inconsistent enforcement of new policies in China and a general lack of knowledge was severely hampering cross-border business relations.

“The central government [in Beijing] has its policies, but the people implementing them below are all unclear on what to do. It says on the books that Hong Kong people can go invest in movie theaters, or can do this or that, but when you get over there, you’ll ask 100 different work units and not a single one will actually know,” said Ng See Yuen, a veteran Hong Kong exhibitor and producer with significant connections to the mainland industry through his UME cinema chain.

“Whoever I ask, they all don’t know,” Ng said to laughter and applause from the mostly Hong Kong crowd. “Clearly, just having the legal article there is not enough.”

Ng elicited further chuckles by saying that accounting in Hong Kong is “very straightforward… trustworthy, and professional,” but that, on the mainland, “the tax employees’ willingness to just act as they see fit is extremely strong, because in the mainland their freedom of explaining laws is extremely broad.”

He called on Hong Kong officials to create a special department designed to help local film industry professionals resolve taxation issues, saying he had been “very irritated” by the lack of information thus far.

“Now that Hong Kong is so intimate and cooperative with the mainland, when it comes to tax law, someone should clearly be giving us counsel and instructions,” he said.

Tsui Siuming, president of the HK TV Assn., compared the situation in China to having a single martial-arts master whose 10 disciples “each invented their own way of executing the moves.”

Tsui said it was “extremely common” for Hong Kong people to waste time and money trying to comply with written policies on establishing entertainment companies in China that “end up turning into nothing,” because mainland gatekeepers were themselves unclear on what was allowed.

“We need to be in solidarity and work together to obtain the conditions that our industry needs to develop in the way it requires,” Tsui said. “It’s a team effort.”

In 2016, Tsui and Ng took over the firm Kailu, which was involved in a scandal that involved the selling of sophisticated financial products against Chinese box office receipts to Chinese retail investors.

More Film

  • The Lion King

    'Lion King' VFX Supervisor Rob Legato to Keynote at the 2019 View Conference

    Rob Legato, visual effects supervisor of “The Lion King,” “The Addams Family” co-director Conrad Vernon and Baobab Studios’ co-founder and chief creative officer Eric Darnell, director of the VR studio’s Emmy- and Annie-winning VR short “Crow: The Legend,” are rounding out the keynote speakers at this fall’s 20th edition of the View Conference in Turin, [...]

  • A woman prays at a makeshift

    Japan Expresses Its Grief Over Deadly Kyoto Animation Arson Attack

    Fellow animators and others in the Japanese entertainment industry have expressed their sorrow and solidarity with Kyoto Animation, the well-respected anime studio that suffered a horrific arson attack and the deaths of dozens of staffers. “We are all fellows in the same boat. If we continue to create without being afraid, we will find solace [...]

  • For Lineup Story

    Billie Piper's Directorial Debut, 'Rare Beasts,' to Bow in Venice Critics' Week

    “Rare Beasts,” the directorial debut of British stage and screen actress Billie Piper (“Doctor Who,” “Penny Dreadful,” “Collateral”) is set to premiere at the Venice Film Festival’s Critics’ Week, which has unveiled its lineup of nine first works, four of them from female filmmakers. Produced by Vaughan Sivell of Western Edge Pictures in association with [...]

  • 'Mientras dure la guerra' -Rodaje Modmedia-

    Alejandro Amenabar, Ricardo Darin, Paco Cabezas Bound for San Sebastian

    MADRID  –  Alejandro Amenábar, Ricardo Darín and Paco Cabezas, director of episodes from “Peaky Blinders” and “American Gods,” look set to join Penelope Cruz, already confirmed as a Donostia Award winner, at this year’s 67th San Sebastian Intl. Film Festival. The biggest movie event in the Spanish-speaking world, this year’s San Sebastian runs Sept.20-28. Amenábar’s [...]

  • Pinewood Studios James Bond

    Netflix's Shepperton Studios Deal Is Stretching the U.K.'s Production Limits

    Netflix’s huge new hub at Shepperton Studios outside London is a further fillip for Britain’s booming production sector. Amid jitters over Brexit and its effects on the economy, the streaming giant’s commitment is a vote of confidence in the U.K. entertainment industry and a continuing source of local jobs. But the decision by Netflix to [...]

  • Bottom of the 9th

    Film Review: ‘Bottom of the 9th’

    Nearly two decades after scoring an audience award at Sundance for “Two Family House,” a smartly understated yet deeply affecting indie about a Staten Island factory worker who deeply regrets stifling his showbiz ambitions, director Raymond De Felitta steps back up to the plate with “Bottom of the 9th,” another dramatically solid and emotionally satisfying [...]

  • Endemol Shine Builds ‘The Bridge’ in

    Endemol Shine Builds ‘The Bridge’ in Africa (EXCLUSIVE)

    DURBAN–Endemol Shine Group has sold the rights to adapt its critically acclaimed and highly popular Nordic Noir detective series “The Bridge” to Cape Town-based production company Both Worlds Pictures, Variety has learned exclusively. The series will feature an all-African cast and will be set around the Beit Bridge border crossing between South Africa and Zimbabwe. Originally known [...]

More From Our Brands

Access exclusive content