Chinese Canadian Rapper Fined $84 Million for Tax Evasion

By: William Hoke

Kris Wu, a Chinese Canadian rapper and actor, was fined CNY 600 million (about $84 million) for tax evasion just days before he was convicted of sex crimes by a Beijing court.

The State Tax Administration said November 25 that Wu, whose real name is Wu Yifan, evaded CNY 179 million of individual and business taxes. “From 2019 to 2020 Wu Yifan made false declarations by fabricating the nature of his income, concealed personal income through multiple domestic and foreign affiliated companies, evaded taxes, and committed other underpayment of taxes,” it said.

Wu was born in Guangzhou but moved to Vancouver with his mother when he was 10 and later obtained Canadian citizenship. Wu was a member of a Chinese-Korean boy band until 2014, when he left to begin a singing and acting career in China.

The tax agency said that although Wu is a Canadian citizen, he stayed more than 183 days in China in 2019 and 2020, which made him tax resident under Chinese law. “The investigation found that when Wu Yifan was engaged in performing arts activities in our country, he took advantage of his foreign status and his travel advantages in the performing arts sector to require domestic enterprises or overseas institutions established by domestic enterprises to pay his personal labor remuneration overseas,” it said. “Compared with other tax evasion cases that have been announced, the tax evasion methods in Wu Yifan’s case are more covert and seriously endanger the tax sovereignty of our country.”

The official Xinhua news agency reported November 25 that Wu was sentenced to 13 years in prison after being found guilty of rape and other sex-related crimes. He was detained in July 2021 after being accused of raping several Chinese girls, some of them underage, while they were intoxicated. Wu will be deported after serving his sentence, Xinhua said.

Wu is the latest Chinese celebrity to run afoul of the State Tax Administration. In 2018 it fined Fan Bingbing CNY 479 million after the film star was accused of underreporting taxable income. In August 2021 the tax agency said another actor, Zheng Shuang, failed to declare CNY 191 million of income and underpaid other taxes in 2019 and 2020.

In November 2021 the government fined two social media personalities a total of CNY 93.3 million after determining that they evaded their income tax liabilities by engaging in fictitious business deals to make it appear that individual income was the revenue of their sole proprietorships. The following month, the State Tax Administration fined the country's top social media influencer, Huang Wei — better known by her internet name, Viya — CNY 1.34 billion for tax evasion.

In February the tax department of Guangzhou City said Ping Rong, a prominent social media influencer, evaded CNY 19.3 million of personal income tax by not reporting commission income and underpaid CNY 14.5 million in other taxes by failing to declare production and operating income. In June the State Tax Administration issued assessments totaling CNY 11.7 million to Sun Zixuan, a social media influencer known online as Emperor Shi, for underpayment of taxes.