China Tightens Ecommerce Tax Reporting for 7000 Platforms

China is strengthening tax regulation on cross-border e-commerce, requiring platforms to report merchant data. In Q3, over 7,000 platforms completed data submissions, resulting in a 12.7% year-on-year increase in e-commerce tax revenue. The new regulations aim to level the playing field between online and offline businesses in terms of taxation. However, compliance costs and data security have emerged as new challenges for sellers. This increased scrutiny necessitates careful attention to data handling and tax obligations for businesses operating in the Chinese cross-border e-commerce market.

E-commerce merchants are increasingly feeling the weight of tax compliance obligations as Chinese tax authorities intensify scrutiny over cross-border transactions. A sweeping transparency reform is underway, requiring platforms like Alibaba, Shein, and Amazon to proactively disclose seller information—including store names, order records, sales volumes, and profit-related data such as virtual gifts.

Data from China’s State Taxation Administration reveals that over 7,000 e-commerce platforms had submitted tax information by the end of the third quarter, contributing to a 12.7% year-over-year increase in e-commerce tax revenue during that period. Projections indicate that online sales of physical goods in China will reach 12.8 trillion yuan ($1.77 trillion) in 2024, accounting for 27% of total retail consumer sales.

  The data-driven regulatory model aims to bridge the tax burden gap between online and offline businesses, promoting fiscal equity. However, the new rules also bring heightened compliance costs and data security challenges for sellers.
 

Some merchants report mounting operational pressures, with potential price hikes on goods to offset added costs. The industry now faces a critical balancing act between regulatory adherence and sustainable growth—a challenge that will define the future of cross-border e-commerce.

Related Topics