Many cross-border e-commerce sellers have had similar operations before: the store’s annual revenue reaches tens of millions of US dollars, and the payment for goods is collected through accounts in Hong Kong, Singapore and other places and is retained overseas for a long time, without completing tax declarations in China.
However, as the regulatory system continues to improve, the risks of such operations have exploded.
Starting from October 2025, mainstream cross-border e-commerce platforms such as Amazon, Temu, and AliExpress have reported tax-related information of Chinese sellers to the Chinese tax authorities on a quarterly basis. The tax authorities have fully grasped core operating data such as sellers’ overseas sales, refund amounts, and various fees deducted by the platform.
After the “VAT Law” is officially implemented in 2026, the three major regulatory systems of platform tax-related data reporting, CRS cross-border information exchange, and corporate income tax audit and collection have been comprehensively tightened. The operating space that used to rely on extracorporeal circulation of overseas funds and tax avoidance by shell companies is being completely closed.
If you meet any of the following situations, you need to focus on the compliance requirements brought about by this regulatory adjustment:
- On Amazon, Temu, TikTok
Shops operated by cross-border platforms such as Shop, Wal-Mart and Shopee - Collect payments from overseas platforms through bank accounts in Hong Kong, Singapore and other places
- Income from overseas platforms is retained overseas for a long time without reporting taxes domestically
- Using the “pay export” method for customs declaration, the subject of exporting goods is inconsistent with the subject of income
- Opening an overseas bank account in an individual’s name to collect payments from companies
- Holding stores or profits through offshore companies and not distributing them for a long time
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Three core risks faced by cross-border e-commerce sellers
Risk 1: Platform data is directly connected to taxation, and income is fully transparent
This regulatory requirement has already been implemented and is not about to be implemented: starting from October 2025, the main
The Liu cross-border e-commerce platform has begun to report full operating data such as sellers’ store identity information, transaction quantity and amount, platform commissions and fees on a quarterly basis. The tax system will automatically compare the data reported by the platform with the enterprise’s declaration data, and data differences will be directly marked as risk-triggered verification.
It is worth noting that the sales amount checked during the tax audit will be retroactively included in the original period when the tax liability actually occurred. Even if the declaration has not been completed in the past few years, once it is checked, the tax will be paid according to the tax rate of that year and late payment fees will be charged, rather than calculated according to the current standards.
Risk 2: CRS makes overseas accounts fully transparent
CRS (Common Reporting Standard) is a global automatic exchange mechanism for tax information. Tax authorities of various countries will exchange information such as balances and income and expenditure records of their residents’ overseas financial accounts with each other. Cross-border e-commerce companies, as entities involved in large amounts of cross-border capital flows, are the key regulatory targets of CRS.
Information such as overseas platform income deposited into overseas accounts, accounts for payment to overseas suppliers, and fund management accounts of overseas subsidiaries will all be synchronized to the domestic tax authorities through CRS.
Among them, three types of sellers have the highest risk: first, those with numerous and complex overseas accounts and unclear capital flows; second, those whose overseas income goes through “extracorporeal circulation” and have not completed the declaration; third, those who use their personal identities to open overseas accounts to collect corporate payments. Shenzhen companies have previously been required to pay more than 2 million yuan in taxes due to undeclared overseas income.
Risk 3: The pay-to-order export operation is completely unworkable
The loopholes in the past pay-to-order exports stemmed from the inaccessibility of data in each link. The data of the platform, customs, and taxation departments were not connected. In 2026, platform data, freight forwarding data, and the entire chain
The three levels of logistics capital data are all in place. The four data items, customs declaration form, logistics form, foreign exchange collection record, and tax refund declaration, must be completely matched. Previously, a foreign trade company in Shenzhen was jointly audited for paying 270 million yuan in export tax evasion, and faced tax repayments, fines, and criminal liability.
Two major changes in the new VAT regulations in 2026 will directly affect sellers’ operations
The “VAT Law of the People’s Republic of China” that will be officially implemented on January 1, 2026 will bring about two major core adjustments: First, the cumulative value-added tax sales for 12 consecutive months will exceed RMB 5 million.
, the general taxpayer status will take effect immediately on the first day of the current period in which the standard is exceeded, and there will no longer be a buffer period of “effectiveness in the next month”. The tax rate will jump from 1%-3% for small-scale taxpayers to 13%; secondly, the sales volume checked during tax audits must be retroactively included in the original period when the tax liability actually occurred. The cost of checking for non-compliance in historical transactions is much higher than the cost of active compliance.
Two risk points that are easily overlooked
First, offshore shell companies are no longer safe. Under the CRS global financial account information exchange, overseas companies’ bank flows and platform capital flows are completely transparent. It is no longer feasible to rely on offshore shells with no personnel, no offices, and no actual operations to transfer profits. Tax authorities can penetrate taxation in accordance with the law. Offshore companies can only be used as overseas store carriers, not as profit retention entities. All operating profits must be returned to domestic entities to declare taxes.
Second, personal accounts face dual risks when collecting corporate payments. The corporate level may be deemed to be tax evasion, and the individual level may be deemed to be personal overseas income and need to pay additional personal income tax.
Seller compliance rectification can start from five major directions
The first step is to comprehensively investigate overseas accounts, sort out overseas bank accounts and third-party payment accounts under the names of enterprises and related personnel, cancel long-term idle accounts, and retain 1-2 main accounts for centralized management; the second step is to standardize tax declarations. Overseas income must be reported truthfully to domestic tax authorities. It is recommended to set up a monthly data two-way verification ledger to ensure that the monthly declaration data is consistent with the data reported by the platform; the third step is to stop
Stop paying export bills and choose the compliant customs declaration route. Those with special input invoices can declare exports independently in the name of their own companies and enjoy export tax rebates. Those who only have compliant customs declarations with general invoices can declare export tax exemption. Those without invoices can register as individual industrial and commercial households in pilot cities through 103.
9 market procurement trade model; the fourth step is to distinguish between personal and corporate funds, and prohibit the use of personal overseas accounts to collect corporate payments; the fifth step is to proactively correct the accounting differences in the past three years. The cost of proactive correction at this stage is far lower than the relevant penalty cost after being audited.
The gray space of cross-border e-commerce is disappearing rapidly in 2026. Data transparency itself is not a risk, but the lack of compliance after data transparency is the core risk. If a seller is not sure whether his business has tax compliance risks, he can log in to the Electronic Taxation Bureau to check whether there are risk warnings and complete rectifications in a timely manner.
