×
You will be redirected back to your article in seconds

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.

Popular on Variety

More Film

  • Beyonce Knowles'The Lion King' film premiere,

    ABC Announces Behind-the-Scenes Special for Beyoncé's 'Lion King' LP

    ABC has announced a new behind-the-scenes look into the making of Beyoncé’s “The Lion King: The Gift” LP, which is set to air September 16 on ABC at 10 p.m. EST. Titled “Beyoncé Presents: Making the Gift,” the new hour-long special will allow viewers to “experience the process” behind the “Lion King” companion album, according [...]

  • Jason Lei Howden, Samara Weaving and

    Daniel Radcliffe On Acting With Weapons Nailed To Your Hands

    How did “Guns Akimbo” director and writer Jason Lei Howden convince Daniel Radcliffe to play a character with guns nailed to his hands? Easy, he sent him the script. Radcliffe joined Howden and “Ready or Not’s” breakout star Samara Weaving in the Variety’s Toronto Film Festival studio, presented by AT&T to talk the limits of [...]

  • Box Office: It Chapter Two Maintains

    Box Office: 'It: Chapter Two' Continues International Reign With $47 Million

    Pennywise’s reign of terror hasn’t wavered: Warner Bros.’ “It Chapter Two” maintained first place on box office charts, led by another strong showing overseas. The sequel, based on Stephen King’s horror novel, generated another $47 million at the international box office for a foreign tally of $169 million. After two weeks of release, “It Chapter [...]

  • First still from the set of

    Taika Waititi’s 'Jojo Rabbit' Wins Top Prize at Toronto Film Festival Awards

    Taika Waititi’s “Jojo Rabbit” has won the coveted People’s Choice Award at this year’s Toronto International Film Festival. The honor positions the film for a potential Oscar run and bolsters its awards chances. That’s good news for Fox Searchlight, which must have been disappointed by the lackluster critical reception for the movie, a dark comedy [...]

  • Constance Wu and Jennifer Lopez star

    Box Office: 'Hustlers' Racks Up Solid $33 Million Debut, 'Goldfinch' Bombs

    “Hustlers” rolled in the Benjamins this weekend, collecting $33.2 million when it debuted in 3,250 North American theaters. Boosted by rave reviews and stellar word of mouth, “Hustlers” beat expectations and now ranks as the best start for an STX film, along with the biggest live-action opening weekend for stars Jennifer Lopez and Constance Wu. [...]

  • German Cinema Is Diverse, But Is

    German Cinema Is Varied, But Is It Too Risk Averse?

    One of the strengths of German cinema is its diversity, says Simone Baumann, managing director of the national film promotion agency German Films. As well as the three films at Toronto directed by female German helmers, there was also German filmmaker Thomas Heise’s documentary film essay “Heimat Is a Space in Time.” Then there were [...]

More From Our Brands

Access exclusive content