China’s tax authorities have moved to enforce stricter digital compliance by requesting detailed sales data from major e-commerce platforms, including Amazon, Temu, Shein and Alibaba’s AliExpress, Bloomberg reported.
The request marks a significant shift in China’s approach to cross-border tax enforcement, targeting Chinese online merchants who underreport sales figures.
This initiative aims to close tax loopholes that have supported low-cost exporting strategies and complex offshore company structures.
The move reflects growing pressure on Beijing to boost fiscal revenues, despite the government’s ongoing need to support smaller exporters during rising global trade tensions.
Authorities track cross-border sales via platform data
In recent months, local tax bureaus across China ordered global e-commerce platforms to submit Chinese sellers’ third-quarter revenue figures, as per the report.
The platforms were not accused of wrongdoing but were required to comply with the requests.
Amazon began sharing data in mid-October, while AliExpress, Temu and Shein also submitted figures.
This was the first time such cross-border digital records were used by China’s tax enforcement agencies to directly link declared business earnings with platform data.
The move offers authorities a more accurate picture of seller performance because official filings often understate true sales.
Tax liabilities raise compliance risks
According to China’s tax code, companies with annual sales above 5 million yuan (around $703,000) must pay up to 13% in value-added tax (VAT). In addition to VAT, corporate levies may apply.
Merchants can only be exempt if they supply valid customs clearance documents, which many online sellers fail to provide under current offshore models.
For those unable to reconcile past filings with platform-reported revenues, back tax demands could erase already thin profit margins.
Several sellers reportedly received calls, texts or in-person visits from local tax staff following these submissions.
The sellers were urged to make payments based on updated figures.
Merchants face scrutiny over business models
Chinese online exporters often operate using a structure that involves registering dozens or even hundreds of companies to gain more exposure on platforms that allow just one store per business.
Many route shipments through mainland firms to Hong Kong-based entities that officially own the stores.
This allows them to reduce or avoid corporate taxes in mainland China.
Under this model, merchants typically report only one storefront’s revenue, which drastically lowers taxable income.
The new data requirement disrupts this system by giving regulators direct access to a consolidated view of actual sales.
E-commerce giants adjust to rising compliance expectations
A September report from Marketplace Pulse stated that Chinese sellers now make up over half of Amazon’s global active seller base.
This growing footprint is now under tighter scrutiny as platforms are pulled into China’s broader campaign against tax evasion.
While Trump-era tariff changes had already strained exporters, recent developments, including the US removing the de minimis exemption for cheap imports, have added further pressure.
Even after a slight easing of tariffs following a recent China–US summit, sellers remain wary of future shifts in trade policy.
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