×
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.

More Film

  • FX's 'Snowfall' Panel TCA Winter Press

    John Singleton Hospitalized After Suffering Stroke

    John Singleton, the two-time Oscar nominated director and writer of “Boyz N’ the Hood,” has suffered a stroke. Sources confirm to Variety that Singleton checked himself into the hospital earlier this week after experiencing pain in his leg. The stroke has been characterized by doctors as “mild.” According to TMZ, which first broke the news, [...]

  • 'Curse of La Llorona' Leads Slow

    'Curse of La Llorona' Leads Slow Easter Weekend at the Box Office

    New Line’s horror pic “The Curse of La Llorona” will summon a solid $25 million debut at the domestic box office, leading a quiet Easter weekend before Marvel’s “Avengers: Endgame” hits theaters on April 26. The James Wan-produced “La Llorona,” playing in 3,372 theaters, was a hit with hispanic audiences, who accounted for nearly 50% [...]

  • Jim Jarmusch in 'Carmine Street Guitars'

    Film Review: 'Carmine Street Guitars'

    “Carmine Street Guitars” is a one-of-a-kind documentary that exudes a gentle, homespun magic. It’s a no-fuss, 80-minute-long portrait of Rick Kelly, who builds and sells custom guitars out of a modest storefront on Carmine Street in New York’s Greenwich Village, and the film touches on obsessions that have been popping up, like fragrant weeds, in [...]

  • Missing Link Laika Studios

    ‘Missing Link’ Again Tops Studios’ TV Ad Spending

    In this week’s edition of the Variety Movie Commercial Tracker, powered by the TV ad measurement and attribution company iSpot.tv, Annapurna Pictures claims the top spot in spending for the second week in a row with “Missing Link.” Ads placed for the animated film had an estimated media value of $5.91 million through Sunday for [...]

  • Little Woods

    Film Review: 'Little Woods'

    So much of the recent political debate has focused on the United States’ southern border, and on the threat of illegal drugs and criminals filtering up through Mexico. But what of the north, where Americans traffic opiates and prescription pills from Canada across a border that runs nearly three times as long? “Little Woods” opens [...]

  • Beyonce's Netflix Deal Worth a Whopping

    Beyonce's Netflix Deal Worth a Whopping $60 Million (EXCLUSIVE)

    Netflix has become a destination for television visionaries like Shonda Rhimes and Ryan Murphy, with deals worth $100 million and $250 million, respectively, and top comedians like Chris Rock and Dave Chappelle ($40 million and $60 million, respectively). The streaming giant, which just announced it’s added nearly 10 million subscribers in Q1, is honing in [...]

More From Our Brands

Access exclusive content