Fan was accused in May of signing secret movie contracts to avoid paying higher taxes to the Chinese Government. It was found that she had split her earnings into two contracts, only reporting the much lower salary figure.
The actor said she felt "ashamed and guilty for what I did", noting she accepted responsibility for having "lost my ability to govern myself in the face of economic interests, leading myself to break the law".
She said she had "endured an unprecedented amount of pain, undergoing deep self-reflection and introspection".
She thanked China's Communist Party and her fans, attributing her success to them, saying she would pay the penalties and in future "uphold the law and respect orders".
"I feel ashamed that I committed tax evasion in Unbreakable Spirit (also known as Air Strike) and other projects by taking advantage of split contracts," Fan said in a statement. "Throughout these days of my co-operation with the taxation authorities' investigation of my accounts as well as my company's, I have realised that, as a public figure, I should've observed the law, setting a good example for society and the industry. I shouldn't have lost my ability to govern myself in the face of economic interests, leading myself to break the law.
"Here I sincerely apologise to society, friends who care about me, the public and the taxation authorities.
"I completely accept the penalties given by the taxation authorities after their thorough investigation. I will follow the final order given by the taxation authorities and will do my best to raise funds to pay back the taxes and fines.
"My success owes to the support from my country and the people. Without the great policies of the (Communist) Party and the country, without the love of the people, there would be no Fan Bingbing.
"Today I'm facing enormous fears and worries over the mistakes I made. I have failed the country, society's support and trust, and the love of my devoted fans. I offer my sincere apology here once again. I beg for everyone's forgiveness.
"I believe that, after this incident, I will uphold the law and respect orders, as well as taking my responsibilities. While I will continue to produce great work for everyone, I will keep a close eye on my company's management to ensure that my company abides by the law, building it into a great company that is cultured and has high integrity, in order to spread positive energy to society.
"Again, I apologise to society and my devoted fans, as well as to my friends and family who care about me. I sincerely say: I am sorry!"
Fan was reportedly held under luxurious house arrest while authorities investigated her case.
According to the South China Morning Post, the actor was kept in a "holiday resort" used to investigate officials, in a suburb of Wuxi in coastal Jiangsu province.
Fan Bingbing. Photo / AP
Fan is one of China's most beloved stars, boasting an impressive film career and a combined social media following of over 65 million people.
The 36-year-old has starred in over 50 films — both Chinese and Western — including Iron Man 3 and X-Men: Days Of Future Past.
Fan will also star in the upcoming film 355 alongside Penelope Cruz, Jessica Chastain and Lupita Nyong'o, and appeared alongside them in Cannes in May to promote it. She's also China's second-highest paid actor, with only Jackie Chan earning more than her between July 2016 and July 2017.
When she abruptly went silent on social media, theories ran wild, from claims she had been taken by the Communist Party to reports she had defected to Los Angeles.
In May, prominent retired Chinese TV presenter Cui Yongyuan appeared to accuse Fan of not paying her taxes.
According to The New York Times, the anchor posted two contracts for an upcoming film Fan was starring in. One allegedly showed a salary of $US1.6 million to be reported to the tax authorities, while another revealed an actual payment of $US7.8 million.
The outlet notes that dual contracts — also known as "yin and yang" contracts — are widespread across many industries in China, as a way to avoid paying taxes; the star receives one contract which is their actual salary, and a second contract with a lower wage number to submit to tax authorities.
Cui's accusation prompted authorities to launch a broad inquiry into the entertainment industry.
"If violations of tax laws and regulations are found, they will be handled in strict accordance with the law," his post warned.
However, it did not mention Fan by name, and the actor initially denied accusations of tax evasion.
The Chinese Communist Party may have used the downfall of Fan, with her immense wealth and status, to send a message to the wider entertainment industry and to reinforce the country's socialist principles.
Following the actor's apparent fall from grace, several local and international brands she represents have sought to distance themselves from her, including Australian health company Swisse.
It's not yet known whether Fan will face further questioning on related investigations.
