For years, Chinese Amazon sellers have struggled with discrepancies between tax authority reports and their actual net income shown in backend systems. This confusion around Amazon's tax reporting methodology has created significant compliance challenges. Now, Amazon has begun proactively disclosing the data parameters and statistical standards it shares with tax authorities—but this transparency may bring new complexities rather than solutions.
Many sellers recently received an email from Amazon titled "View Your China Tax Report for July-September 2025" . The message explained that under China's State Council Decree No. 810, the platform must quarterly submit seller information to Chinese tax authorities. The reports include seller identification details, transaction counts, revenue data, and breakdowns of platform commissions and service fees, with a 7-day download window provided.
Understanding the Reporting Discrepancies
Amazon's email specifically noted that these quarterly tax reports may differ from the payment reports and VAT transaction reports sellers typically review. The platform attributes these variations to fundamentally different statistical methodologies and application scenarios—essentially, "the algorithms are different."
Key Differences in Reporting Methodologies
1. Revenue Calculation: Orders Over Payments
Tax reports use orders—not net income or actual deposited amounts—as the primary dimension for sales data aggregation. For cross-border transactions, Amazon calculates logistics revenue based on the central platform exchange rate when products actually ship to buyers. This creates potential discrepancies between settlement amounts sellers see and tax report figures.
2. Transaction Timing: Ship Date Rules
The reports use order shipment dates rather than payment cycles for period classification. An order shipped June 30 but settled in July would appear in Q2 tax reports but might be recorded as Q3 income in seller accounting. This temporal misalignment frequently causes confusion.
3. Comprehensive vs. Net Reporting
Tax reports present gross figures including product sales, shipping fees, gift wrapping charges, discounts, taxes, and surcharges—with platform fees itemized separately. Seller portals typically show net amounts after deductions. This fundamental presentation difference makes direct comparisons challenging.
Growing Compliance Concerns
While tax policy implementation has progressed, sellers report ongoing confusion about specific reporting requirements and operational standards. The lack of clear official guidance, combined with tax reports showing higher revenue figures due to broader inclusion criteria, has increased anxiety about potential tax burdens.
Many sellers are now reevaluating their account structures and long-term business strategies to maintain compliance while mitigating tax risks—a complex balancing act in an evolving regulatory environment.