Tax evasion: Zheng Shuang fined $62m, permanently banned from Weibo and Chinese programmes

It's been said that two things in life are constant: death and taxes. You can try to evade your taxes, but justice always comes collecting on its bill.

And that's what happened to Chinese actress Zheng Shuang.

According to an online statement, the 30-year-old has been fined 299 million yuan ($62 million) for tax evasion and undeclared income between 2019 and 2020.

On Friday (Aug 27), China's State Tax Administration (STA) revealed that Zheng Shuang failed to declare 191 million yuan in income, leading to tax evasion of 48 million yuan as well as 26.5 million yuan in underpaid taxes.

A spokesperson for STA said: "The Zheng Shuang tax evasion case involves multiple regions, multiple companies and multiple performing arts projects across the country, and the case is complicated."

It was reported that she is accused of using a 'yin and yang' contract to evade taxes.

The spokesperson shared that a "comprehensive and in-depth" investigation was conducted over the past four months into the use of her 'yin and yang' contract.

Such contracts are allegedly common in the Chinese entertainment industry and the practice involves two contracts — one (the 'yin') that details the actual income, and another (the 'yang'), with lower earnings, which is submitted to the tax authorities.

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The STA said that Zheng Shuang used a company that she owned to conceal her actual salary for the 2019 drama A Chinese Ghost Story.

When it was announced that her salary for the role was 160 million yuan, members of the public were angry as they felt that it highlighted the issues with China's wealth disparity.

Incidentally, that sum isn't accurate and it was reported that the declaration of her salary seemingly triggered the investigations.

Zheng Shuang's ex-partner, television producer Zhang Heng, was a co-conspirator in the tax evasion scheme but decided to flip and become a key whistle-blower for the case, said the STA.

According to the STA, should Zheng Shuang pay her fines, she is unlikely to face criminal charges. However, there was no confirmation on whether Zhang would be fined too.

It's not just a monetary price that Zheng Shuang has to pay, though.

Her career in China seems to be over as the National Radio and Television Administration announced that all programmes she was in should be taken off the air. Radio and television broadcasting organisations are also not allowed to feature her in any programmes.

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Just last month, Zheng Shuang broke her silence on her surrogacy scandal and the claims that Zhang levelled at her in January. He claimed that she had abandoned their two surrogate children in the United States.

She made a Weibo post in Mandarin and wrote: "I sincerely apologise for the surrogacy incident, am willing to accept criticisms from all sides and consciously reflect on my mistakes."

Interestingly, she also denied the allegations of tax evasion and use of 'yin and yang' contracts at that time.

"I am willing to make up the shortfall if there are errors caused by my negligence or unprofessionalism. I hope the tax authorities can accord me due process and not be influenced by the surrogacy incident," she wrote.

On Friday, she posted on her Weibo account apologising for her actions, adding she feels very regretful and guilty. 

Well, guess the truth has finally come to light.

bryanlim@asiaone.com