On March 15, CCTV News and other state media reported Deng Lun (邓伦) was recently investigated by the Shanghai Local Taxation Bureau No.4 Inspection Bureau on suspicion of tax evasion based on clues in their review and big data analytics. According to their comprehensive investigation, Deng Lun made false tax declarations by switching the nature of income from fictitious businesses between 2019 and 2020. As a result, Deng Lun was found to have evaded paying 47.65 million RMB and underpaid 13.99 million RMB in personal income taxes.
Deng Lun was said to have actively participated and cooperated during the investigation and took the initiative to pay 44.55 million RMB in back taxes. At the same time, Deng Lun also proactively reported other tax code violations that the tax bureau hadn’t reviewed yet.
In accordance with the tax law, Deng Lun was fined a total of 106 million RMB in back taxes, lates fees, and fines. Among the 106 million RMB, Deng Lun voluntarily did his own investigation on the false tax declarations and paid back 44.55 million RMB in back taxes and a fine 0.5 times of the owed taxes totaling, 22.27 million RMB. Of the unpaid 3.11 million RMB in false tax declarations, it wasn’t self inspected nor repaid, which resulted in a fine 4 times of the amount, totaling 12.43 million RMB. The Shanghai Local Taxation Bureau No.4 Inspection Bureau had already delivered their decision and administrative punishment to Deng Lun in recent days.
A representative from the Shanghai tax bureau stated after finding the tax anomalies through the analysis of big data, they started their investigation on Deng Lun’s taxes. The relevant tax authorities had already reminded and urged Deng Lun to make the appropriate corrections, but still found his actions to be incomplete.
After the news went viral with over 40 million mentions at one point, Deng Lun issued an apology letter, saying, “During the process of cooperating with the tax bureau’s investigation this time, I have already deeply self-reflected and deeply realized my own mistakes. I accept all decisions from the tax bureau. I am willing to accept responsibility and the consequences for all the related matters and will continue to proactively work hard. Deeply apologize for taking up public resources during the pandemic.”
Not too long after, several of Deng Lun’s social media accounts, including his personal Weibo and his studio, Dou Yin, and more were removed from their respective platforms. Several of Deng Lun’s sponsors have already terminated their partnership with him.
Since last year, China has implemented laws and regulations on banning entertainment workers with bad track records and commit crimes, especially tax evasion, from working in the industry again.