The State Administration of Taxation ("SAT") has recently issued the Circular on Further Maintaining the Taxation Order in the Film and Television Industry (the "Circular").

The Circular expressly states that, from October 2018 till the end of July 2019, a series of steps will be taken, including self-inspections and proactive self-corrections, urged corrections, targeted inspections, and summaries and improvements, to gradually have the taxation order in the film and television industry get back on the right track. In particular, the Circular provides that, starting from October 10, 2018, tax authorities in all regions shall inform film and television production companies, agent companies, performing arts companies, celebrities' workshops, etc., as well as high-income practitioners in the film and TV industry, in the local region, of conducting self-inspections of their tax return filing since 2016 and taking remedial measures. Enterprises and practitioners in the film and television industry will be exempt from administrative punishments and fines, as long as they have conducted self-inspections efficiently and voluntarily pay the overdue tax by the end of December 2018. Furthermore, the Circular warns that, during the period from March 2019 to the end of June 2019, tax authorities will launch targeted inspections among those enterprises and practitioners doing business in the film and television industry that refuse to take corrective actions, and seriously cope with their possible violations according to the law.

(Source: SAT)