China ‘Owes Hollywood Millions For Films’

Superman and Batman
A tax row means Hollywood studios are apparently waiting for millions in royalties from blockbuster films like Man of Steel.
Hollywood studios are waiting for millions of dollars after a film organisation in China stopped paying royalties for blockbusters like Man of Steel and Skyfall.

The China Film Group, the only organisation allowed to import foreign films into the country, has been withholding payments because of a dispute over tax, according to the Hollywood Reporter.
China stopped payment at the beginning of the year when US studios took issue with a 2% value-added tax that the Asian power was levying on American films.
Chinese authorities want the studios to pay them the tax, but the studios argue it violates a World Trade Organisation agreement governing the film trade between the two countries.
China has been relatively closed to big-budget foreign films in the past, but recently increased its quota from 20 to 34 a year.
The Motion Picture Association of America (MPAA), which acts on behalf of studios’ interests, is negotiating with Chinese authorities to resolve the tax dispute.
Disney, Warner, Universal, Paramount, Fox and Sony are reportedly involved in the row.
The Hollywood Reporter estimates that Warner Brothers would be owed more than $31m (£20m) in royalties from three films – Man of Steel, Hobbit: An Unexpected Journey and Jack the Giant Slayer.
Iron Man 3, which made over $121m (£79m) in China, means Disney has missed out on $30m.
In the meantime, lack of profit has not deterred US studios from sending their films to China, which currently has the world’s most dynamic movie market.