Out of all Fan's films and business ventures, she was found to have paid 248 million yuan less tax, 134 million yuan of which constituted tax evasion.
According to state-run news agency Xinhua, Fan has been ordered to pay nearly $130 million, after she misreported how much money she had received for certain film projects, using so-called "yin-yang contracts" to hide from the authorities her true remuneration and avoid millions of dollars in taxes.
The government said that, as a first-time offender, she would not face criminal charges if she paid all of the money by an undisclosed deadline, Xinhua reported.
She had disappeared from public view in June following reports she was being investigated for tax fraud. Fan Bingbing, who is set to appear alongside Bruce Willis in the upcoming film Air Strike, posted on her Weibo account for the first time in months shortly after the penalties were announced, according to The Hollywood Reporter. "Here, I sincerely apologize to everyone".
"Without the Party and country's good policies, without the loving attention of the masses, there would be no Fan Bingbing", she wrote. "I have reflected on my actions".
She said she accepted the punishment meted out by the authorities and will pay the fine. She was transferred to Beijing for further investigation, the Post said, citing unnamed sources.
So-called "yin and yang" dual contract arrangements - with one contract for income declared to tax authorities while the other is kept secret - are reported to be used in China to evade taxes.
Fan's office has denied ever using such contracts.
One of China's most famous actors with a career spanning two decades, the 36-year-old is best known in the west for her role in X-Men: Days of Future Past.