The Chinese government has issued a limit on the pay of actors in a move to clamp down on tax evasion, ‘sky-high salaries’ and ‘money worship’ in the entertainment industry.
The salaries of all performers in each movie or TV series must not exceed 40 per cent of the total production costs while the leading actors will have their pay capped at 70 per cent of total wages for the entire cast.
The country’s highest paid actress, Fan Bingbing (范冰冰), 36, was ranked No. 5 in the Forbes’ list of the world’s richest actresses in 2016, earning an annual income of US$17 million (£14 million), ahead of Julia Roberts and Charlize Theron.
Chinese actress Fan Bingbing (left) and singer and actor Lu Han (right) are among the highest paid celebrities in China. However, the government is clamping down on their excessive pay
The order, announced on Wednesday, comes after a series of tax evasion allegations among Chinese celebrities in the industry.
The new regulation was announced on Xinhua and issued jointly by five government agencies including the tax authority, the propaganda department, the culture and tourism ministry and the state radio, television and film regulators.
The directive also aims to put an end to ‘yin-yang contracts’, an expression in China referring to real and fake agreements operating side-by-side that hides the real pay of high-profile stars.
The dubious system serves as a form of tax evasion where the smaller contract is disclosed to the tax authorities as income.
The other, larger contract could remain unreported and would be given to the actor as tax-free income.
‘These issues have increased the cost film and television programme production, affected the overall quality of domestic film and television creation and damaged the health of the health and film and TV industry,’ the notice said.
‘Additionally, these problems have led to money-worshipping values, distorted social values and misled younger generations,’ the notice said, adding that China’s youth have been encouraged to ‘blindly chase stars’.
The notice added that productions should ‘prioritise benefits to society’ rather than considering only ‘box office returns, ratings and click-through rates’.
The percentages, which are the same as those in guidelines issued by the China Alliance of Radio Film and Television last year, apply not only to film productions but also online content.
Fan was one of the film stars alleged to have used the dual contracting system to evade tax.
In May, Chinese television presenter-producer Cui Yongyuan posted screenshots of Fan’s alleged employment contracts – one for 10 million yuan (£1.15 million) and another for 50 million yuan (£5.8 million).
While Fan has denied any wrongdoing, Cui has accused other celebrities – who are also massively overpaid – of the same practice.
Earlier this month, China’s tax authorities began an investigation into ‘the tax evasion issue by certain film and TV professionals as alleged in online discussions’.
Earlier this month, the State Administration of Taxation has asked the local bureau in the southern province of Jiangsu, where Fan runs a film studio, to carry out investigations.
China.s cinema market is worth US$8.6 billion (£6.6 billion) and is set to expand rapidly, according to Reuters.
Who are the highest paid actors and actresses in China?
Chinese actress Fan Bingbing and singer and actor Lu Han are among the highest paid celebrities in China, according to Forbes
Here are the top five highest paid celebrities in China last year, according to Forbes China. The list also takes into account their popularity, commercial value and media exposure.
1. Fan Bingbing (范冰冰), actress, 300 million yuan (£35 million)
2. Lu Han (鹿晗), actor and singer, 210 million yuan (£24 million)
3. Yang Mi (杨幂), actress, 200 million yuan (£23 million)
4. Zhao Liying (赵丽颖), actress, 190 million yuan (£22 million)
5. Yang Yang (杨洋), actor, 240 million yuan (£28 million)