Editor's Note: Against the backdrop of building a unified national market, policies like fiscal rebates have been explicitly prohibited and gradually phased out, impacting the online freight industry which relied on such policy benefits. Coupled with the introduction of internet platform information reporting requirements, platforms now face higher compliance costs to adapt. Additionally, specialized campaigns targeting "illegal fuel stations" have severely hit platforms relying on non-compliant fuel invoices for VAT input deductions. Many online freight platforms face existential challenges, with some raising commission rates to offset rising operational and tax compliance costs. Facing these changes, what key tax compliance points should online freight platforms prioritize? This article provides a brief discussion.

I. Recent Developments: Multiple Platforms Face Survival Challenges, Some Raise Rates

Similar to the renewable resources and coal industries, the transport sector has long struggled with the lack of source documentation (e.g., from individual truck drivers). Traditionally, transport firms commonly used "unofficial receipts" (白条) or self-made vouchers to reduce corporate income tax (CIT), while others obtained transport invoices from third parties for VAT deduction and CIT expense claims. These practices carry high risks of fraudulent invoicing and tax evasion.

Benefiting from IT advancements, online freight platforms have surged. (Per Modern Logistics News) By the end of June 2025, China had 3,286 online freight enterprises, integrating 8.044 million vehicles and 7.377 million drivers. Their model: The platform operator signs a transport contract as the carrier with the consignor, then subcontracts the actual transport to real carriers. Transport companies (as consignors) contract with the platform, which issues them transport invoices, solving the problem of obtaining input invoices from individual drivers. This model heavily relies on local policy-based tax rebates to balance tax burdens.

However, the industry now faces a survival crisis. Some platforms face cash flow strain or even rupture due to unfulfilled or suspended rebate payouts; others face demands to repay huge amounts of VAT and CIT. To cope, some platforms recently notified rate increases to 10%-11%, passing costs to consignors, who now face dual crises of missing input invoices and soaring operational costs.

II. Policy & Regulatory Factors Driving Up Operational & Compliance Costs

(A) Rebate Payout Woes Will Force Model Restructuring

Recently, per the NDRC-led four-ministry joint notice Notice on Regulating Matters Related to Investment Promotion Policies (NDRC Reform [2025] No. 770, unpublished). Multiple provinces are drafting cleanup plans. One province ordered a full review of all existing local government fiscal rebates/subsidies for investment promotion, directly or via state-funded entities. Policies violating central directives must be abolished by end-August 2025. It explicitly bans illegal tax/fee rebates, including: illegal rebates of PIT, vehicle/vessel tax; [tax rebates for flexible employment, online freight, renewable resource platforms]; tax rebates/export subsidies for entities; illegal land sale revenue reductions/rebates; land use rights transfers below minimum prices.

For platforms reliant on fiscal rebates, halted or difficult payouts threaten survival. Rate hikes are only a stopgap; cost-shifting to consignors is unsustainable. Simultaneously, logistics firms' traditional reliance on platforms for input invoices is untenable. Restructuring business models to balance compliance and sustainability is now a shared survival imperative.

(B) New Internet Reporting Rules Increase Compliance Costs
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On June 20, 2025, Regulations on Tax-Related Information Reporting by Internet Platform Enterprises (State Council Decree No. 810, "Decree 810") took effect. To implement it, the State Taxation Administration (STA) issued Announcements 2025-15 and 2025-16. These detail the scope, content, timing, methods, and penalties for non-compliance, covering eight types of platforms including online freight. While enhancing transparency and tax compliance, they raise the compliance bar, particularly in two areas:

1. Reporting Challenges: Current rules are complex – technical, multi-form, dense fields/terminology, strict formatting. Front-line staff errors due to misunderstanding lead to long processing times, high error rates, hidden risks, and higher costs. Data quality varies, causing frequent rework and reduced efficiency.
2. Accounting Bottlenecks: Massive monthly multi-batch, multi-item independent accounting for vast workforces involves complex operations like cumulative withholding and post-tax calculations. Accuracy is hard with massive data. Lack of linkage between income reporting and tax filings forces manual per-transaction processing, causing inefficiency. Deadline pressure risks inconsistencies between reports, tax calculations, and final filings, or delays, leading to compliance risks and financial losses.

C) Fuel Invoice Deductions Face Tighter Rules, Raising Platform Risks

Article 2 of STA Announcement 2017-30 allows platforms acting as carriers to deduct input VAT on self-procured fuel/tolls given to actual carriers, provided: (1) Used for the subcontracted transport; (2) Compliant VAT deduction certificates obtained. However, some platforms exploit loopholes (e.g., buying surplus fuel station invoices, fabricating fuel volumes), triggering heightened scrutiny. Tax authorities use measures like setting reasonable truck fuel consumption per 100km and limiting deduction ratios. Earlier this year, STA and MOT departments held industry consultations, indicating refined rules for Announcement 2017-30 are under study. Tighter regulation is inevitable. Non-compliant firms risk input reversal, back taxes, late fees, and even license revocation.

III. Platforms Must Build Multi-Layered Tax Compliance Defenses

(A) Restructure Business Models on a Foundation of Tax Compliance

As policy dividends fade, platforms must recognize their core value lies in digitally integrating capacity to reduce logistics costs, not tax arbitrage. Build a closed-loop data chain (waybill, tracking, payment, fuel) enforcing "Four Flows Integration". Examples: Driver-vehicle binding (driver's license/vehicle license/bank card linked to waybill); Fund transparency (payments direct to driver accounts, no third-party collection); AI detection of anomalies like simultaneous fueling in multiple locations.

(B) Scrutinize Legality of Fiscal Rebates, Ensure Proper Accounting

Amidst the crackdown, platforms should: Review existing agreements' legality; Monitor regulatory updates; Assess payout risks; Adjust business models. Ensure fulfillment of agreement obligations (e.g., using rebates only for stipulated purposes) to avoid legal risks. Assess whether fiscal subsidies/rebates are subject to CIT/VAT and fulfill tax obligations. For new local incentives, rigorously vet legality, including fund sources and eligibility criteria.

(C) Enhance Platform Oversight, Comply with New Reporting Rules

Platforms must: Improve data governance – establish a lifecycle management system (collection, processing, storage, reporting) ensuring reliable sources, accurate definitions, and quality. Meet reporting deadlines. Stay updated on policy changes; Communicate proactively with tax authorities. Conduct regular staff training on tax laws; Establish robust internal review mechanisms for accuracy.

(D) Explicitly Define Fuel Costs in Contracts & Retain Evidence

Contracts should specify fee components (transport fee, fuel, etc.) and detailed fuel calculation rules (e.g., benchmark fuel consumption per 100km by vehicle type, multiplied by waybill distance and real-time fuel price; attach provincial ETC fee standards). Splitting ratios must align with industry norms, avoiding abnormally high fuel costs or route mismatches. Retain proof costs were incurred for the specific transport: Fueling time within transport period; Gas station location on/near route; Use verification methods (e.g., facial recognition payment at pump) proving the driver was the user.

IV. Conclusion

With illegal fiscal rebates halted and new internet reporting rules in place, online freight platforms must recognize the traditional "invoice-issuing" model is unsustainable. Rate hikes merely shift costs temporarily. Survival requires restructuring business models based on tax compliance, refocusing on core logistics services. Constant vigilance on policy/regulatory shifts is crucial to avoid tax risks from improper accounting or reporting errors