China Introduce New Rules to Regulate the Profit-Making Livestream Sector

BEIJING, March 30 (TMTPOST)— Chinese government is tightening up regulation on the live-streaming industry as the top market regulator, the national tax authority and the top cyber security regulator jointly introduced new rules to reinforce scrutiny of the booming sector.

Source: Visual China

The new regulations, under the documentation titled as Opinions of Further Regulation on the Profit-Making Practices in the Online Livesteaming to Improve the Sector’s Healthy Deveopment (the “Opinions”), were issued by the Cyberspace Administration of China (CAC), the State Taxation Administration (STA) and the State Administration for Market Regulation (SAMR) on Tuesday.

Under the Opinions,米乐m6app, online platforms which offer live-streaming services shall carry out their responsibilities to manage live-streaming account signups and their classification, report liver-streamers’ information including identities, live-streaming accounts, online IDs or nicknames, income accounts, income types to tax authorities and cyber security agencies on half a year basis,  and cooperate with regulators’ enforcement activities. The live-streaming platforms and live-stream hosts shall not attract viewers by false advertising, self-dipping and other improper means. The platforms and live-streaming service providers are required to bear their obligations to withhold income tax and not allowed to evade or shift the responsibility, or help live-streamers to dodge the tax.

Earlier that day, the Wall Street Journal’s sources said that Chinese regulators were drawing up new restrictions to cap netizens’ daily spending on digital tipping, a major revenue source of live-streaming influencers. And they also reported to consider setting the daily maximum earnings that liverstreamer can receive from dips and virtual gifts.     

Last December, Viya, a Chinese top influencers dubbed as ‘Livestreaming Queen’, was fined a record of RMB1.34 billion (US$210 million) and her social media accounts were suspended due to tax evasion. A couple of days later,  a total of eight local tax authorities issued their warning to celebrities including livestream stars and asked them to report their tax-related problems and correct them by the end of the year. Li Jiaqi, another popular livestreamer, was cautioned against improper practices for the Zhejiang Provincial Consumer Rights Protection Committee found about one-third of sample goods that he and other influencers sold online in last year’s Singles Day, an annual shopping event in November, didn't meet the national quality standard. More than 1,000 livestreamers moved to pay back taxes following the government guidance to tighten tax regulation in the entertainment industry in last September, the state media China Central Television (CCTV) that month noted.

Earlier this month, Li Jun, a delegate to the 5th session of the 13th National People’s Congress has called for a ban on tipping on live-streaming platforms and stricter regulations over the industry. “If doing things like that can make you rich very easily, then many people will think that doing ordinary job is meaningless,” Li said.