The Chinese government fined Fan, 37, and companies she represents to pay a collective total of $130 million for taxes and penalties, according to the Associated Press.
Xinhua reports that the government won't bring criminal charges against the actress because this is her first offense. For these violations, the Jiangsu Tax Bureau is fining Fan and her legal representative 880 million yuan.
Hours after the news from the tax authorities, Fan posted a letter of apology on her personal account on microblogging platform Weibo, saying she deeply regretted her actions and felt ashamed of what she had done.
Reuters was unable to contact Fan or her agent when inquiring about those reports. "Without the Party and the state's good policies, without the love from the people, there would have been no Fan Bingbing".
She was fined more than 479 million yuan (about US$70 million) personally and ordered to pay more than 288 million yuan in unpaid taxes, and her companies were fined a total of 125 million yuan.
According to Chinese media, the actress evaded £800,000 in taxes by signing up to a secret contract worth £2.2m for Air Strike. I have failed the support of my country, the trust of society, and the love of my devoted fans!
While the host later retracted the accusation and Fan denied any wrongdoing, her subsequent silence resonated far louder, igniting rampant speculation aboutwhat had become of one of China's most recognizable people.
Fan was not mentioned by name but she has businesses registered in Jiangsu. The nation's highest paid actress, Fan has tens of millions of followers on the popular Sina Weibo network and is the face of many luxury endorsements in the country.
Bingbing owes up to $128 million in back taxes, fees, and additional fines. The contracts alleged that Fan exploited a double-billing system, known as "yin yang contracts", to earn $7.5 million for a 2003 film while only paying taxes on $1.5 million.
There was no immediate comment from Fan or a representative for the actor.
"As a public figure, I should have abided by laws and regulations", she wrote, "and been a role model in the industry and society". She has since been relocated to Beijing.
In addition to her film and TV roles, Fan was the face of numerous brands in China, but her reputation has undoubtedly been tarnished by this case and her disappearance caused headlines around the world.
In September, she came in last out of a hundred stars ranked in a state-sanctioned study on the social responsibility of Chinese, Taiwanese and Hong Kong celebrities. The process, known as using "yin-yang contracts", is reportedly a common entertainment industry practice in China, with an actor's having a public contract stating a salary as well as a private contract listing much higher pay.