On November 27, 2022, the Second Inspection Bureau of the Beijing Municipal Tax Service investigated Kris Wu’s alleged tax evasion. Unlike previous tax evasion cases involving actors or livestreamers, this case stood out because the individual involved is a Canadian citizen who utilized offshore entities to evade taxes. For years, China has lacked sufficient examples of cross-border tax evasion cases. However, the tax authorities’ decision to publicly disclose the details of this case marks a historic milestone in addressing cross-border tax evasion in China.
Kris Wu’s method of cross-border tax evasion reflects a common practice in China. It’s highly likely that local tax authorities will use this case as a benchmark for future penalties on similar cross-border tax evasion cases. Below, we’ll analyze the key points of this case, incorporating excerpts from the Beijing Municipal Tax Service’s press release (italicized).