Following Zhang Heng’s claims that his ex Zheng Shuang evaded taxes using yin-yang contracts and also received exorbitant pay in spite of the cap on celebrity salaries, China’s state-controlled broadcaster CCTV has reported that Zheng Shuang is under investigation. They also made their stance on tax evasion clear saying that those who are found guilty will face consequences.
Yin-Yang Contracts in the Chinese Entertainment Industry
It can be recalled that the whole notion of tax evasion in C-ent was put on the spotlight when A-list actress Fan Bingbing was accused and later found guilty of engaging in yin-yang contracts. Yin-yang contracts refer to using two contracts at the same time. One contract known as the yang (representing light) contract reflects a lower amount that is then reported to tax authorities. One contract known as the yin (representing dark) contract reflects the higher amount that will not be reported. This is done in order hide a person’s true earnings thus allowing them to pay less taxes. In Zheng Shuang’s case, her ex claims that she had two separate contracts for her work in A Chinese Ghost Story – one worth RMB 48 million reported to authorities and the remaining RMB 112 million paid to a company owned by her mother Liu Yan.
Following the renewed attention on tax evasion, netizens are calling for a thorough investigation. There were reports that several celebrity studios have recently shut down. Some speculate that it is in preparation for an industry crackdown.
Zheng Shuang Breaks Her Silence
On April 29, Zheng Shuang who hasn’t responded to her ex’s accusations finally issued a statement through her studio. She said, “The tax department is already verifying my contracts, personal taxes and all related economic agreements. I am willing to accept and cooperate with all investigations. The results will be announced to the public. Thank you for everyone’s attention.”