Chinese authorities in Shanghai have announced that actress Liu Xiaoqing has been cleared of any tax violations following an investigation. This revelation comes after a whistleblower's complaint earlier this year, underscoring a growing emphasis on transparency within China's entertainment industry.

The Shanghai Municipal Tax Service, part of the State Taxation Administration, released a statement confirming that their legal review found no evidence to support the allegations made by a complainant known as Wang. The authority emphasized its commitment to maintaining strict tax supervision and encouraging compliance among individuals and businesses.

Liu Xiaoqing took to social media on the same day to publicly address the investigation's outcome. She stated that no evidence of the alleged tax issues was found, reinforcing her intention to comply with tax regulations and fulfill her responsibilities as a citizen.

The inquiry stemmed from a formal complaint made by Wang on May 15, which asserted that Liu engaged in tax evasion through her wholly-owned company, Shanghai Yixi Cultural Media Center. The complaint alleged that the company misused value-added tax (VAT) invoices to reduce higher personal income taxes.

According to the allegations, Liu reportedly funneled 3.3 million yuan, equivalent to about 463,000 USD, in endorsement income into her company as "image ambassador fees," subsequently using VAT invoices taxed at a lower rate to avoid the higher personal income tax rates that reach beyond 27 percent.

The complainant further alleged that Liu's company lacked a legitimate office and employee records, which purportedly indicated efforts to issue false invoices and evade taxes. Liu vigorously denied these claims, describing them as malicious and inconsistent with the truth.

The actress highlighted her willingness for a thorough and transparent investigation into her income and tax affairs, reiterating that adhering to tax laws is a civic duty that every citizen should uphold.

Liu Xiaoqing, born October 30, 1950, in Chongqing Municipality, is a prominent figure in the Chinese entertainment industry and has faced legal scrutiny in the past. Notably, in 2002, she was involved in a high-profile tax case where her company was found to have evaded 14.58 million yuan in taxes.

Although Liu was not prosecuted after settling her tax liabilities, the previous case remains a significant chapter in her career, making the recent resolution of the current tax allegations particularly important in terms of her public image.

The conclusion of this investigation reflects the broader push for accountability and transparency in the entertainment sector in China, as authorities seek to foster a more compliant environment and reinforce public trust.