Hollywood, China mired in tax dispute

Apr 26, 2013, 5:51 PM EDT
Director Ang Lee attends the UK Premiere of 'Life of Pi at Empire Leicester Square on December 3, 2012 in London, England.
Getty Images/Tim Whitby

Hollywood film studios and Chinese authorities are in dispute over the application of China's new value added tax to foreign films. China Film Group, China's state-owned film distributor, is seeking to deduct this entirely from the foreign producers' share of the box office, Hollywood executives reportedly say. News Corp.'s Twentieth Century Fox is refusing to accept $23 million it is owed in Chinese box-office receipts for producing "Life of Pi" until the dispute is resolved, the Wall Street Journal reports. The application of the tax is seen in Hollywood as the latest effort to hinder the U.S. film industry's ability to generate profits in the fast growing Chinese market.