A cross-border e-commerce client walked into my office last week. First question: "Mike, did the platform already report my Q4 2025 revenue to the tax bureau?"
Yes. And Q1 2026 too. His face went pale.
I've been getting this question a lot lately. E-commerce sellers are waking up to a reality: the "no invoice = no tax" logic is dead.
The rule is already in effect — for nine months.
In June 2025, the State Council published the Administrative Regulation on Internet Platform Enterprise Tax-Related Information Reporting (Order No. 810). It took effect October 2025.
By June 2026, platforms have already filed the first identity-information report (October 2025) and submitted Q4 2025 and Q1 2026 revenue data (in January and April 2026; Q2 2026 is due in July). Your actual transaction flow — every order, every payment — is on the tax bureau's desk.
This isn't a crackdown. It's a systemic shift from "human surveillance" to "system-to-system" tax collection. And it's already happened.
What sellers should do now
- Reconcile. Compare your actual platform revenue from the past 2-3 years against what you declared. Month by month.
- Assess the gap. Small gap → proactively amend your filings. Large gap (e.g., millions in unreported revenue) → consider restructuring your entity.
- Choose the right entity structure. Annual GMV under RMB 5M → sole proprietorship or individual business. RMB 5M-50M → limited liability company (enjoy SME tax benefits). Over RMB 50M → group structure with separate operating, brand, and supply chain entities.
Overseas e-commerce is not a tax loophole.
Moving your business cross-border doesn't make domestic tax exposure disappear. A "fake offshore" structure — entity moved abroad but operations still in China — actually creates dual exposure: domestic tax sees your China-side revenue, and the destination country's tax authority can see your overseas income through CRS information exchange.
The bottom line: This regulation isn't designed to destroy e-commerce businesses. It's upgrading tax collection from tip-based enforcement to data-driven compliance. The data is already there. The question is what you do about it.
If you're reconciling your books or considering restructuring, I'm happy to talk.
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Mike Wu, China-licensed Attorney · Cross-border practice
4 languages (CN/EN/ES/JA)
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