tax Photo: VCG

China’s State Taxation Administration disclosed a major tax fraud case in which a multi-channel network (MCN) colluded with illegal intermediaries to engage in false invoicing, tax evasion, and seeking fraudulent subsidies, China Media Group (CMG) reported.

Guangdong Huizhou Gaofushuai Culture Media Co was detected for issuing 1,196 false invoices through shell companies, with a total value reaching 226 million yuan ($31 million). 

According to local taxation authorities, the company assisted more than 700 internet anchors evade personal income tax of more than 32 million yuan, while the company itself underpaid a total of approximately 21 million yuan in taxes and fees. 

MCNs act as a key intermediate link connecting live-streaming platforms and those internet anchors. 

The company is suspected of evading its obligation to withhold and pay personal income tax, planning and assisting its affiliated internet anchors in tax evasion, issuing false value-added tax invoices, and conspiring with illegal intermediary agencies to defraud local government subsidies. 

These actions severely disrupted tax collection and management order, and undermined the fair and competitive market environment, CMG reported. The Huizhou taxation inspection bureau recently decided to impose penalties on the company.

China’s taxation authorities carried out inspections on 169 internet anchors in 2024. The total amount of tax revenue recouped added up to a total of 899 million yuan, which effectively maintained the taxation order of the online live-streaming service industry and promoted the healthy development of the sector, Xinhua News Agency reported.

Global Times