Nine of China’s top television and film production and distribution companies have agreed to cap wage payments for performers, amid an ongoing investigation into allegations of tax evasion by some of the country’s highest paid celebrities.
Under the new arrangement, television actors will be paid a maximum of 1 million yuan (US$145,000) per episode and not more than 50 million yuan for an entire season, regardless of its length, The Beijing News reported on Sunday.
There are currently about 50 actors in mainland China that could earn 50 million yuan or more for a drama season, the report said, citing industry insiders.
While it is standard practice in China for contracts to quote payments in net terms, the new caps relate to wages before tax, the report said.
As well as the personal salary restrictions, the companies said they would adhere to a government ruling announced in late June that capped television actors’ compensation at 40 per cent of the total production budget. And as with film stars, no more than 70 per cent of that pot will be paid to a single performer, the report said.
Before the new deal – which was made public late on Friday – wage payments to big name celebrities tended to account for between 50 and 80 per cent of the total production cost.
The authorities’ ruling on wage caps followed a public outcry sparked by claims that some performers had been implicated in tax-dodging dual-pay schemes known as “yin-yang contracts”.
The furore began in May after television presenter Cui Yongyuan posted images of documents on social media that he said were evidence of their existence.
The idea behind the dual contracts is that performers sign two sets of documents, one that lays out the actual terms of their deal and the other, with vastly reduced payment figures, to be presented to the tax authorities.
The production companies and distributors said they would not condone any acts of tax evasion, including the use of “yin-yang contracts”, and would blacklist and report anyone suspected of trying to defraud the authorities.
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Chinese news outlet Caixin cited a film producer as saying that the wage payment caps appeared to be based on production costs and the government’s guidelines.
Amid all the recent controversy and policy uncertainty, only about 20 films were currently in production at Hengdian, one of China’s major studios, compared with 60 or 70 last summer, the producer said.
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Despite her claim, China’s film and television industry has been booming in recent years. According to figures from the Motion Picture Association of America, it contributed US$86.3 billion to the economy in 2016, a rise of 25 per cent from two years earlier.
The sector also supports 4.1 million jobs and generates US$15.9 billion in tax revenue, it said.