To implement the relevant requirements of Notice on Comprehensive Administration of Entertainment Industry issued by Publicity Department of CPC Central Committee, the General Office of State Taxation Administration issued a notice recently, asking to strengthen tax administration on practitioners in entertainment industries, the specific contents are as following:

1. Strengthen daily tax administration
   
   

   (1)	Individual studios and enterprises incorporated by entertainers and internet anchor are no longer subject to tax collection by verification method, who shall maintain accounting books and systems to declare and pay taxes in accordance with tax laws and regulations.
   (2)	Tax authorities shall perform taxation risk analysis on a regular basis. One-to-one risk hints and supervision for entertainers and internet anchor of tax-related risks shall be performed with reference to the handling of annual settlement of IIT in 2020.
   (3)	Tax authorities shall perform “Double random, one open” tax inspection on a regular basis, increase the extent of intimidation and exposure of the typical cases of tax evasion in entertainment industry as well. “Double random” means to establish and improve the databases of enterprises and tax inspectors, select inspection objects and tax inspectors from the databases at random by lottery method. “One open” means the communication and share of regulatory information between government departments and upper and lower levels of each department, a unified platform of market regulatory information shall be formed based on the national publicity system of enterprise credit information.
   (4)	Strengthen supervision and inspection for routine tax levy and administration performed by tax authorities at grass-roots level, tax officers who take advantage of their power to practice favouritism and commit fraud shall be dealt with severely.

   
   
2. Urge agents to fulfill withholding obligations
   
   Tax authorities shall strengthen the administration on brokerage companies of entertainers, internet anchors, brokers and related producers, urge them to fulfill withholding obligation of Individual Income Tax, provide relevant information and cooperate with tax authorities to implement tax administration on entertainers and internet anchors.
   
   
3. Standardize administration on preferential tax policy in entertainment industry
   
   

   (1)	Tax authorities at all levels shall not implement tax preferences by setting up enterprises or through other flexible ways in violation of tax laws and regulations.
   (2)	Tax authorities shall carry out inspection on whether entertainers and internet anchors are eligible to enjoy tax incentives, prohibit to expand scope of tax preferential policy, and ensure relevant enterprises and individuals to fully enjoy tax incentives in accordance with tax laws and regulations.

   
   
4. Strengthen education and publicity of tax law for practitioners
   
   

   (1)	Tax authorities shall promptly address the demands for tax payment services and legitimate & reasonable demands related to taxes that raised by practitioners and enterprises in entertainment industry.
   (2)	For practitioners and enterprises in entertainment industry who pay taxes in good manner, tax authorities shall propaganda extensively to further improve tax law compliance for practitioners and enterprises in entertainment industry.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advice and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.