China’s digital platform Oct 2025 reporting obligations paying off
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China’s enhanced October 2026 marketplace reporting regime has increased tax visibility and collections by 13% from online sellers.
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Mandatory, standardised data submissions from marketplaces are closing long-standing gaps between online and offline taxation.
China’s State Administration of Taxation (SAT) has implemented new tax reporting rules targeting digital platform operators to enhance transparency and strengthen tax compliance.
Since the strengthened rules took effect in October, online platforms have been required to submit structured, merchant-level data directly to tax authorities. This includes seller identities, order volumes, sales revenues, and income from digital activity such as livestreaming and virtual gifts. While similar reporting obligations have existed since 2019, enforcement was inconsistent. The new regime introduces clear deadlines, defined datasets, and accountability at platform level.
7,000 platforms already reporting tax data
The response from the market has been swift. By the end of the third quarter, more than 7,000 ecommerce platforms had submitted tax-related information to the State Taxation Administration according to the Financial Times. Major domestic and international platforms — including Alibaba, Shein and Amazon — are now fully within scope.
Tax revenues linked to ecommerce platforms rose by 12.7 per cent year-on-year in the third quarter, according to official figures.
Closing the online tax gap
Online retail now accounts for nearly 27 per cent of China’s total retail sales — approximately Rmb12.8tn in 2024 — yet its contribution to tax revenues has historically lagged behind that of traditional retail. The core objective of the new rules is to correct that imbalance.
Tax authorities are now systematically comparing sellers’ self-declared income with independently reported platform data. Where discrepancies arise, vendors are issued reminders or follow-up notices. Officials say this has “significantly narrowed” the tax burden gap between online and offline merchants, reducing opportunities for under-reporting that were previously difficult to detect at scale.
This represents a fundamental change in enforcement approach: compliance is no longer driven primarily by audits or voluntary disclosure, but by continuous third-party data validation.
A model others are watching
China’s experience shows how marketplace reporting, when clearly defined and enforced, can deliver rapid revenue gains. By shifting responsibility to platforms and leveraging real transaction data, authorities have turned ecommerce from a compliance blind spot into a dependable tax channel.
This follows similar marketplace reporting obligations in: Vietnam; the EU via DAC7; Australia; New Zealand; and the UK.
The OECD marketplace reporting guidelines has gone a long way to standardising the reporting obligations globally – although China’s quarterly version is much stricter.
Fines for non-compliance
Importantly, platforms are accountable for verifying tax-related data accuracy but are protected from penalties if they fulfill verification duties and still receive incorrect information from users. The first required reports are due in October 2025. Non-compliance can result in penalties of up to RMB 500,000 and business suspensions. Authorities stress the rules won’t raise taxes for compliant small businesses but are expected to increase the tax liability for those underreporting income.
