China Film Group owes millions of dollars worth of import taxes to Disney, Warner Universal, Paramount, Fox and Sony. For Man of Steel, Skyfall and Life of Pi alone they owe $77 million.
China Film Group decided that they were peeved at having to pay 2% tax on all Hollywood imported films even though it had already been agreed upon in a World Trade Organisation agreement.
Though the WTO is certainly not the most upstanding organization by any stretch of the imagination, doesn’t stop this particular pickle from just being another case of illegal tax evasion, albeit a particularly high powered, high stakes one.
In the WTO accord that was signed last year, China and the US decided that they would increase the import of US blockbusters from 20 to 34 films a year and Hollywood Studios’ revenue share would be fixed at 25%.
Despite this agreement, the Motion Picture Association of America is negotiating on their tippiest of tippy toes as they attempt to resolve this issue without deterring the world’s largest movie-going market from investing in future productions.
[Image credit: John Royle via The Sunday Telegraph]