Chinese Actress Liu Xiaqing Embroiled in Tax Evasion Scandal

The incident has raised concerns about the actress's financial dealings and potential tax evasion. The Shanghai Municipal Taxation Bureau's Fourth Inspection Bureau has confirmed that they have received the whistleblower's report and are currently investigating the matter. Liu Xiaqing has denied any wrongdoing, stating that she does not know the whistleblower and that the allegations are "completely false and malicious." The investigation has also revealed that Liu Xiaqing had exited her role as a shareholder of the company in question, Liu Xiaqing Jewelry (Ningbo) Co., Ltd., in April 2021.

The company has been listed as a non-normal taxpayer by the Ningbo High-Tech Zone Taxation Bureau and has been included in the list of abnormal business operations by the Ningbo Municipal Market Supervision and Administration Bureau. The timeline surrounding Liu Xiaoqing's exit from the company has raised questions about her potential liability in the alleged tax evasion case. According to records, Liu Xiaoqing officially stepped down as a shareholder of Liu Xiaoqing Jewelry (Ningbo) Co., Ltd. in April 2021, approximately three months after the allegations surfaced.

The fact that Liu Xiaoqing exited the company in April 2021, following the January 2021 whistleblower report, suggests a potential attempt to distance herself from the company amidst allegations of wrongdoing. However, if the allegations of tax evasion are substantiated, Liu Xiaoqing may still be held liable for her role as a shareholder during the period in question. The company, Liu Xiaoqing Jewelry (Ningbo) Co., Ltd., has been listed as an abnormally operating company since July 2024 due to its failure to disclose annual reports as required by regulations.

Lawyers believe that if the allegations against Liu Xiaoqing are true, her actions may involve multiple legal violations, including fraudulent reporting and issuing false value-added tax invoices. If it is proven that Liu Xiaoqing intentionally evaded taxes, she may not only have to pay substantial back taxes but also face criminal prosecution, potentially triggering a chain reaction of liability for her business partners and affiliated companies. According to a lawyer who has been following the case, Liu Xiaoqing's alleged actions constitute a typical case of fraudulent reporting, as she converted loan proceeds into personal income through fictional "image endorsement fees."

The company involved in the scandal has been accused of issuing invoices without engaging in any actual business operations, which could be considered a crime of issuing false value-added tax invoices. If the allegations are substantiated, Liu Xiaoqing may face severe penalties, including fines and even imprisonment, depending on the severity of the offenses. The allegations of tax evasion against Liu Xiaoqing have ignited a heated debate among netizens, with some internet users believing that Liu's actions may be in violation of multiple laws and regulations.

In response to the allegations, Liu Xiaoqing has expressed her willingness to cooperate with the authorities and undergo any necessary investigations, maintaining that she has nothing to hide. She also claims to have no prior connection or acquaintance with the whistleblower, Wang, who filed the complaint against her. Netizens have been actively discussing the allegations on social media, with some calling for a thorough investigation into Liu's tax affairs. Many are questioning how someone with a history of tax evasion, like Liu, could have allegedly continued to engage in similar behavior.

It is worth noting that this is not the first time Liu Xiaoqing has been embroiled in a tax controversy. In 2002, she was detained for 422 days due to her company's alleged tax evasion, which amounted to millions of yuan. Although she was not prosecuted at the time due to insufficient evidence, her brother-in-law, Jing Jun, was sentenced to prison as the company's legal representative. Liu later sold off some of her assets to pay off the taxes owed and eventually made a comeback in the public eye. However, the latest allegations suggest that Liu may have continued to have tax issues, with multiple records of supplementary tax payments and penalties in Shanghai. This has led some to label her as a "repeat offender," raising concerns about the effectiveness of the tax enforcement system in China.