Agent fined US$5m for helping actress Zheng evade taxes

Whistle-blower Zhang Heng has been fined 32.27 million yuan (US$5.02 million) for helping Chinese actress Zheng Shuang evade taxes, Shanghai's State Taxation Administration announced on Oct 18.

In August, Zheng Shuang was slapped with a 299-million-yuan penalty for tax evasion by using "yin-yang contracts" – open and secret dual-priced contracts.

Zhang, one of the whistle-blowers in that case, was found serving as Zheng's agent at the time. He was then also suspected of directly manipulating the enforcement of the contracts as well as pressing for and receiving payments to help Zheng evade taxes.

According to the administration, Zhang, as Zheng's agent during the 2019 TV series project Qian Nv You Hun, managed the actress' affairs, including the 160-million-yuan split contracts and setting up a "cover company."

Zhang discussed the split of Zheng's remuneration and the payment method with the series producer in detail.

He planned the specific operation details, determining the remuneration amount and payment plan: Of the total 160 million yuan, only 48 million yuan was declared, while the rest 112 million yuan (108 million yuan actually received) was paid in the form of "capital increase" to a company owned by Zheng, leading to a total tax evasion of 43.027 million yuan and other underpaid taxes of 16.1778 million yuan.

Zhang also directly manipulated enforcement of the contracts, as well as pressing for and receiving payments, the administration found out.

In total, he was officially fined 32.27 million yuan in penalties.