Ai's firm told it has not paid corporate taxes

[July 14, 2011]  BEIJING (AP) -- Chinese authorities told representatives of outspoken artist Ai Weiwei's design firm Thursday that the company had not paid corporate taxes for a decade, but did not allow them to keep documents showing the alleged offense.

The representatives, including Ai's wife, were shown the documents at a hearing they had been granted to challenge a $1.85 million tax bill delivered by authorities after the dissident was released from nearly three months' detention.

The prominent government critic was the most high-profile target of a sweeping crackdown on activists this year and his detention sparked international outcry, with some countries saying it was a sign that the human rights situation in China was deteriorating.

Tax officials visited Ai's studio late last month to say his design company Beijing Fake Cultural Development Ltd. owed $770,000 in back taxes from the last decade and $1.1 million in fines.

Ai's wife, Lu Qing, who is the legal representative of the design company, said that at the hearing at the Beijing Local Taxation Bureau they were shown photocopies of documents officials said disclosed that the company had not paid corporate taxes from 2000 to 2010.

The copies were of papers seized in raids on Ai's home and office, but Ai's lawyer Xia Lin said they were not allowed to keep them.

"The two main concerns remain. It's a closed process, and according to Chinese law the documents they took from us should have been returned after three months, which was on July 8. Those documents still have not been returned," he said.

Lu said he did not know what the next step was, and that at this moment another hearing has not been requested.

Ai's family previously denied he evaded any taxes and activists say the accusations were a false premise for detaining Ai. His supporters say he is being punished for his critical views of the Communist leadership and social problems. Before his own detention, he tracked the detention of other activists.

Ai was detained April 3 and released June 22. He has declined interviews about his detention or the investigation since then, saying the terms of his bail prohibit it.

Ai was not at the hearing.

Chinese authorities have said that although Ai was released, he is technically still under investigation for at least a year and could be brought in for further questioning at any time.

Ai is internationally known and has earned huge sums selling his work at auctions and through galleries. In February, a 220-pound (100-kilogram) pile of handmade porcelain sunflower seeds he commissioned for a show in London sold for more than $550,000 at auction.

Lu also said it was not clear when Ai would be able to take up an offer to be a visiting lecturer at Berlin's University of Arts.

The university first published the offer -- in the works since December -- following Ai's detention in April.

"It is unclear when he will be able to leave the country because he does not have his passport," she said.

[Associated Press; By CHI-CHI ZHANG]

Follow Chi-Chi Zhang at http://twitter.com/thunderchi.

Associated Press writer Gillian Wong contributed to this story.

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