Paying taxes in accordance with the law is the responsibility of every citizen, but there are always some people who are lucky and try to evade taxes, especially in the entertainment industry, which is the hardest hit area.
According to China's tax law, 40% of the personal income tax will be deducted for the part of the labor remuneration exceeding 50,000 yuan, which is undoubtedly a huge amount of money for star artists with a salary of seven or eight figures, so many star artists will take risks and try to evade taxes.
In 2018, a well-known first-line female star was reported for tax evasion of hundreds of millions of yuan, which was on the hot search, which was a very hot topic at the time, and finally the star was required to pay back taxes and fines of hundreds of millions of yuan, and also ruined her acting career
So how did the actress evade taxes?That's the yin-yang contract. Evade taxes through yin-yang contracts, make false income declarations to the tax bureau, report the "yang contract" to the tax bureau, and sign the "yin contract" privately, so as to achieve the purpose of underpaying taxes.
Not only the actress, but also many other celebrities are evading taxes through yin and yang contracts. A few years ago, it was revealed that another actress also used this routine to avoid taxes, and the actress's actual salary was as high as 15.6 billion, but it was divided into two parts, of which 48 million yuan was taxed as remuneration income, and the other 10.8 billion is to enter the company actually controlled by the actress in the form of "capital increase" through a false contract, and to achieve tax evasion by concealing income and making false declarations.
In addition to the purpose of tax evasion through yin and yang contracts and concealment of income, there is also the method of splitting the contract and calculating taxes separately, which means that when a contract contains two items with different tax rates, it will be taxed at a higher tax rate.
In fact, there is some controversy about the practice of splitting contracts, and some people think that this belongs to the scope of reasonable tax avoidance, but in fact, this kind of behavior is still illegal and does not belong to reasonable tax avoidance.
There are many other ways to avoid tax avoidance, such as spreading payments to avoid excess progressive tax rate increasesFor example, opening a number of individual studios, converting remuneration income into studio operating income, or replacing remuneration with equity.
These celebrities and their teams have a weak sense of law, and they are lucky, thinking that underpaying taxes is not a big deal and will not be discovered, but in the end they still pay for their actions.
It is worth mentioning that reasonable tax avoidance is legal, and only tax evasion constitutes an illegal act. For taxpayers who evade or evade taxes, the tax authorities will recover the unpaid or underpaid taxes and late fees, and impose a fine of not less than 50% and not more than five times the amount of the non-paid or underpaid taxesIf the amount of tax is relatively large and the circumstances are serious and constitute a crime, they will also be investigated for criminal responsibility in accordance with the law.
However, in order to reasonably avoid taxes, we must start from standardizing the contract, reflect the real business operation trajectory, pay taxes in the right way, strive to ensure that every step is supported by relevant documents, and do it in a down-to-earth manner in accordance with the relevant compliance requirements of the tax, so that there will be no problems.