Tax authorities clear actress Liu Xiaoqing of tax-evasion allegations

Chinese actress Liu Xiaoqing has been cleared of tax evasion allegations following an investigation, the Shanghai tax authorities said on Friday.

The fourth inspection bureau of Shanghai Municipal Tax Service, the State Taxation Administration, announced that the investigation found no evidence supporting the tax violation claims made against Liu and her associated companies.

"The tax authorities have completed their investigation and found no irregularities as alleged in the report," Liu said on her social media platform Weibo on the same day.

Liu added that she would "continue to comply with national laws and regulations and honestly fulfill tax obligations."

The investigation stemmed from allegations made earlier this year by an individual surnamed Wang, who claimed that Liu had engaged in tax evasion schemes involving her jewelry business and media company.

According to previous media reports, Wang alleged that in 2020, Liu Xiaoqing Jewelry (Ningbo) Co Ltd borrowed more than 3 million yuan ($417,600) from him. He claimed that Liu subsequently transferred this amount through her small enterprise, Shanghai Yixi culture media center, categorizing it as endorsement fees.

Wang alleged that this arrangement was designed to exploit the 6 percent value-added tax rate instead of paying the higher personal income tax rate of over 27 percent.

On May 15, Liu issued a statement on Weibo denying the allegations, emphasizing that she had never met Wang and had no prior interactions with him. "The content of Wang's report does not align with objective facts and constitutes malicious reporting," Liu said at the time.

Liu also revealed that a people's court had already examined and ruled on the matter, issuing a judgment that found no connection between her and the alleged loan from Wang. According to Liu, Wang's tax evasion allegations came after losing the court case, suggesting a potential retaliatory motive.

"Despite the ongoing investigation and lack of conclusions, Wang chose to widely publicize these allegations through social media platforms, attempting to manipulate public opinion. Such behavior is reprehensible," Liu stated in her May declaration.

Liu said she is willing to have her income and tax records examined by relevant authorities. "Paying taxes according to the law is the statutory obligation of every citizen," she emphasized in her recent statement.