Tax info sharing to spur platform economy

China's efforts to regulate the submission of tax-related information by internet platform companies will standardize tax reporting practices among these enterprises both at home and abroad, and boost the sound and regulated development of the platform economy, experts said.

US tech company Amazon has announced that it will begin reporting information about China-based sellers to the nation's tax authority in accordance with new government regulations.

Amazon said the required information includes sellers' identity information, number of transactions, revenue, commission and service fees.

It added that the policy applies to all China-based sellers who sell goods, services or intangible items to customers across Amazon's worldwide store network.

Amazon noted that the first quarterly filing deadline is Oct 31, which covers the third quarter of 2025. Subsequent reports will be submitted every quarter.

The company emphasized that reporting requirements apply to all China-based sellers, regardless of which Amazon store they sell in. Even if a seller only sells products on Amazon's US marketplace, their account information will still be reported to China's tax authority.

In June, the State Council, China's Cabinet, issued new regulations on the reporting of tax-related information by internet platform companies.

According to the rules, starting Oct 1, platform companies are required to submit the identity information of operators and employees, as well as income data for the previous quarter, to their respective tax authorities within one month following the end of each quarter.

These regulations established mandatory reporting obligations for all platforms serving Chinese sellers, regardless of whether those platforms operate domestically or internationally. The State Taxation Administration also released a notice, requiring both domestic and overseas internet platforms to submit tax-related information about Chinese sellers to the authority.

In September, cross-border platforms such as AliExpress and Shein began issuing notices and reminders to sellers regarding the reporting of tax-related information. Alibaba Group's online marketplaces Tmall and Taobao, and e-commerce platform JD have also released similar announcements.

These platforms said they will submit sellers' identity information and revenue data for the third quarter of the year to tax authorities for the first time in October.

Hong Yong, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, said, "The move to report Chinese sellers' tax-related information to China's tax authorities signifies that the supervision over cross-border e-commerce platform enterprises' tax situation will become more transparent."

Noting that platforms are required to submit sellers' identity and transaction data on a quarterly basis, Hong said that the previous practice of concealing income information will no longer be viable, making compliance the new bottom line for survival.

In the face of new regulations, Chinese merchants should proactively verify and ensure that their information matches their tax records, and establish a robust financial and tax compliance system to align with the global trend toward tax transparency.

Zhu Keli, founding director of the China Institute of New Economy, said in the past, some sellers evaded tax responsibilities through information asymmetries, leading to low prices and cutthroat competition. However, the new rules on tax-related information reporting by internet platform companies will further promote the long-term and healthy development of the cross-border e-commerce industry.

"The tax transparency will help sellers to restructure their financial systems and make their orders, payments and logistics traceable, while laying a solid foundation for their future fundraising and listing. Compliance capabilities will emerge as the new core competitiveness for internet platform enterprises," Zhu added.

He noted that tax compliance will not increase the burden of merchants on e-commerce platforms. In the long run, enterprises that boast strong supply chain management and tax planning capabilities will gain an upper hand in the increasingly fierce competition.

Since 2022, tax authorities have piloted quarterly reporting of tax-related information by internet platform enterprises engaged in activities, such as online sales and livestreaming in five provincial-level regions, according to the State Taxation Administration.

fanfeifei@chinadaily.com.cn