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China announced that it will limit the donations that streamers receive for their work.
After years without regulations, this could be a before and after for the online entertainment industry.
The total number of streaming users in China in 2021 exceeded 700 million.
The Chinese government will seek to limit the donations that users make to streamers, with the intention of regulating their earnings.
Since the launch of platforms like Discord, Twitch, Facebook gameroom, Youtube and more, more and more users are yearning to become streamers, and China is no exception. At the end of 2021, according to data from Statista, there were approximately 703 million live streamers in Chinawhich represents a penetration rate of 68.2 percent among Internet users. YY Live, Huya and Huoshan were the main live streaming platforms in China.
For this reason, the Chinese government has made the decision to impose regulatory measures in the social media entertainment sector, after there were never any regulatory laws for this type of channel with live content, something that has always been regulated globally in elements such as telecommunications .
This case is very similar to that of the Spanish streamers, elRubius, TheGrefg, Auronplay, Willyrex and Vegetta among others, who were accused of having withdrawn from Spain and having moved to Andorra, considered a tax haven where they can live tax-free, earning even more than they earn in Iberian territory.
China is afraid of influencers; will limit donations for streamers
According to the information collected, what the Chinese authorities are proposing, and which is also already a reality, is to put a significant limit on the donations that streamers receive and that can be made on the platforms. This has been reconsidered because these influencers receive large amounts of money without any regulation, something that goes against the “philosophy of the nation”.
The established law that will limit donations from streamers indicates that, per day, donations that exceed 1,570 US dollars cannot be received. This might seem like too much money for many, but for certain users of online entertainment it is not so much, however, limiting it to donations per day means that this amount can be better distributed without the need to generate millionaire amounts in a short time and without any type of consequence.
On the other hand, the measure is part of a series of regulations imposed by the China Cyberspace Administration, State Administration of Taxation and State Administration for Market Regulation on streaming platforms because despite generating millions of dollars in income and profits, they operated in gray areas in fiscal matters. In this sense, the Chinese tax authorities have ordered that the platform take charge of the Income Tax withholding regarding the income of streamers by way of donations during their transmissions.
These measures have been taken because it was considered that streamers constantly ignore invitations from the authorities to pay their taxes in the same way that other inhabitants with “traditional” jobs do. Likewise, the government took advantage of this new law to put into practice the so-called “fiscal terrorism”, which allows it to fine these influencers for large amounts for having evaded the treasury for so long.
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