China targets tax evasion by sellers on ecommerce platforms

Chinese tax authorities have ordered ecommerce platforms, including Amazon, to submit sales data from Chinese merchants for the first time, according to sources cited by Bloomberg.

Amazon began providing the data in mid-October, while other platforms such as Alibaba’s AliExpress, Temu, and Shein complied earlier.

The move is aimed at curbing tax evasion by ensuring reported sales figures match actual transactions on these platforms.

Under Chinese law, companies with annual sales over 5 million yuan (about US$703,000) must pay up to 13% in value-added tax unless they provide specific export documentation, which many online sellers lack.

Chinese merchants now account for over half of Amazon’s global active seller base, according to Marketplace Pulse.

Several online sellers told Bloomberg they received immediate payment demands from local tax authorities after the platforms shared their sales information.

Update: (November 18, 2:00 p.m. SGT): This headline was updated to add a statement from an Amazon spokesperson.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Chinese sellers face VAT liabilities without export paperwork

Sellers on Amazon and other sites need qualifying export paperwork to get zero-rated value-added tax (VAT) at 0% 1. Without it, general taxpayers (a Chinese VAT category for businesses with annual taxable sales above RMB 5 million) pay 13%, 9% or 6% on taxable domestic sales 1.
The Draft VAT Implementation Regulations (a proposed update that clarifies how VAT is administered) lists zero-rated cross-border services 2. New platform reporting lets tax bureaus match seller income with platform data to spot gaps, and Amazon told Chinese sellers on October 13, 2025 that quarterly reporting would start, with the first July–September 2025 file due October 31 3. Cross-border e-commerce hit 2.38 trillion yuan in 2023 4, so mismatches could create large tax bills as Chinese merchants make up over half of Amazon’s active sellers.

Tax-tech providers can build compliance tools for Chinese cross-border sellers

China’s e-commerce market reached CNY 15.4 trillion in 2023, which drives demand for automated tools that produce compliant export paperwork and handle VAT filings 4.
Platforms must file quarterly identity plus income data for operators and employees with Chinese authorities 3. By mid-October 2025 thousands filed, including Pinduoduo (a discount marketplace), Ele.me (a food-delivery platform) and Didi Chuxing (a ride-hailing company) 3. Logistics providers can bundle compliant documentation with shipping through tax-tech partnerships, targeting the 165 cross-border e-commerce comprehensive pilot zones (designated areas that streamline customs and offer subsidies and infrastructure support) 5.