Recently, many cross-border e-commerce merchants have received text messages from tax authorities, informing them that their reported third-quarter VAT sales revenue was lower than the revenue reported to the tax authorities by the internet platform companies. They are advised to self-check for underpaid taxes and correct their declarations. Why have tax risks suddenly surged for cross-border e-commerce? Why is there a discrepancy between taxpayer declarations and platform-reported data? Can income from fake transactions be deducted? Can commissions paid to platform companies be offset as input VAT or deducted before tax? What should be done if purchase invoices are not obtained for goods? Cross-border e-commerce faces numerous tax challenges. This article aims to address current hot issues and provide tax compliance advice for cross-border e-commerce for reference.

I. New Regulations on Tax-Related Information Reporting Promote Comprehensive Upgrade of Tax Supervision
In June 2025, the State Taxation Administration issued the "Regulations on Tax-Related Information Reporting by Internet Platform Enterprises" along with supporting operational rules. These regulations require overseas internet platform enterprises to report the identity information of domestic operators on their platforms and the revenue information for the previous quarter to Chinese tax authorities within the month following the end of each quarter. By November 2025, overseas internet platform enterprises such as Amazon had completed their initial submissions in accordance with the regulations. This enabled tax authorities to obtain data on third-quarter sales revenue of cross-border e-commerce through overseas platform enterprises, marking the official arrival of a tax compliance era for cross-border e-commerce and a comprehensive upgrade in tax supervision.
For tax authorities, this breaks away from the previous model of relying solely on taxpayer self-reporting. By precisely comparing revenue data reported by cross-border e-commerce operators with data submitted by overseas platform enterprises, authorities have shifted from a "passive reception" approach to an "active verification" supervision mode.
For cross-border e-commerce operators, past practices such as hiding income through private accounts or deliberately underreporting revenue to evade taxes are now more likely to be detected through discrepancies between platform-reported data and self-reported data, exposing them to risks such as tax repayment, late fees, and penalties for tax evasion. Additionally, operators must pay close attention to the data scope of their own tax filings, understand the statistical standards of revenue reported by overseas platform enterprises, clarify the reasons for any discrepancies, standardize export trade behavior, and prevent economic losses caused by non-compliant practices.

II. Answers to the Top Ten Hot Tax Issues in Cross-Border E-commerce
Q&A 1: What sales revenue data do overseas platform enterprises submit to the tax authorities?
According to the "Announcement of the State Administration of Taxation on Matters Concerning the Submission of Tax-Related Information by Internet Platform Enterprises" (State Administration of Taxation Announcement No. 15 of 2025) and Appendix 5 "Submission Form for Income Information of Operators and Practitioners on the Platform," overseas platform enterprises submit three types of sales revenue data to tax authorities: total revenue, refund amount, and net revenue.
Total revenue refers to the total sales proceeds from goods, services, etc., obtained by cross-border e-commerce during the period. It cannot deduct the amount of actual subsidies provided by platform enterprises or government bodies, nor can it deduct other fees such as platform commissions or service fees. Refund amount refers to the amount from returned goods, returns without returning goods, or service refunds arising from cross-border e-commerce sales. Net revenue refers to total revenue minus refund amount.
Q&A 2: Why does the VAT sales revenue amount declared via SMS appear lower than the sales revenue submitted by overseas platform enterprises?
The main reasons for the discrepancy can be divided into two categories.
First, inconsistencies between declaration and submission standards. This can be detailed in three points:
1. Cross-border e-commerce confuses revenue with gross profit. The declared sales revenue of cross-border e-commerce is essentially the gross profit, i.e., the amount after deducting platform commissions, service fees, and other costs, whereas the sales revenue reported by overseas platform enterprises is the amount before these deductions.
2. Different bases for sales revenue statistics, i.e., different interpretations of the "current period." Cross-border e-commerce may collect revenue based on invoice or shipping time, while overseas platform enterprises may base it on the buyer's confirmation time, causing the same revenue to fall into different quarterly periods and resulting in discrepancies in "current period" data.
3. Different handling of refunds. Cross-border e-commerce deducts the refund amount and declares net revenue for tax purposes, whereas overseas platform enterprises typically calculate actual refund amounts from the previous quarter in the next quarter. Therefore, the first sales revenue data submitted by overseas platform enterprises to tax authorities only includes total revenue, without refund amount or net revenue.
Second, non-compliant behavior by cross-border e-commerce. This can be detailed in two points:
1. Fake transactions (shua dan). To increase sales volume and positive reviews, cross-border e-commerce artificially inflates product sales and rankings in a short period through fake transactions to gain more traffic advantages from overseas platform enterprises. Cross-border e-commerce excludes the revenue from fake transactions when declaring sales, but overseas platform enterprises include it in the reported sales revenue.
2. Export using another's name. Some cross-border e-commerce enterprises lack export qualifications and do not sell goods through entrusted export models, but instead purchase customs declaration forms from qualified foreign trade enterprises and conduct exports under someone else's name, not participating in customs declaration or foreign exchange settlement. In such cases, the cross-border e-commerce enterprise receives revenue without legally declaring taxes, while the overseas platform enterprise reports the actual transaction sales revenue to the tax authorities.

Q&A 3: Can the commission and service fees paid to the platform be deducted as input tax and pre-tax expenses?
According to the aforementioned Appendix 5, the commissions and service fees paid by cross-border e-commerce to the platform are also among the tax-related data reported by overseas platform enterprises. Therefore, tax authorities can access data on the fees that cross-border e-commerce pays to platforms. However, whether they can be deducted as input tax or pre-tax expenses depends on whether compliant vouchers can be obtained. Regarding VAT, according to Article 12 of the Provisional Regulations on VAT, "The sale of services within the territory refers to: (1) services... purchased by a buyer within the territory." Article 8, Item (4) states that "the following input VAT can be deducted from output VAT... VAT mentioned on the tax payment certificate obtained from the tax authorities or withholding agent for services purchased from overseas entities." If an overseas platform provides services to cross-border e-commerce, when a general taxpayer cross-border e-commerce entity pays the relevant fees and withholds VAT at a 6% rate, it can legally issue a tax payment certificate for input VAT deduction. However, if the services provided by the overseas platform are entirely rendered abroad, they are not subject to VAT, and cross-border e-commerce cannot claim input tax deduction.
Regarding corporate income tax, according to Article 11 of the Administrative Measures for Pre-tax Deduction Certificates for Corporate Income Tax, "Expenditures incurred by enterprises for services purchased from overseas can be deducted before tax based on invoices or payment receipts with invoice nature issued by the other party and related tax payment certificates." Accordingly, cross-border e-commerce can use commercial invoices, payment receipts, and other documents issued by the overseas platform as the basis for deductions.
Q&A 4: What should be done if the reporting basis does not match the submission basis?
First, carefully investigate the cause of the discrepancy and identify the specific type of difference. You can match the detailed data reported by the overseas platform with the VAT tax return details one by one to clarify the specific situation. Second, depending on the specific cause, provide appropriate supporting materials and correct the declaration promptly. For example, if revenue and gross profit are confused, this is an error in the cross-border e-commerce reporting basis. The gross profit should be corrected to goods sales revenue in accordance with the law, and fees paid to the platform, such as commissions, should be listed as selling expenses. At the same time, retain the platform commission agreement and tax payment certificates for input tax deduction and pre-tax expense deduction. If sales revenue is declared based on the invoice date, organize the details of unbilled revenue and correct the tax declaration in time. If discrepancies arise due to refunds, prepare refund order details, buyer refund applications, and proof of fund returns, and provide explanations to the tax authorities.

Q&A 5: Can income from fake orders be deducted from declared sales revenue?
According to Article 1 of the "Provisional Regulations on Value-Added Tax," "Units and individuals selling goods within China are taxpayers of value-added tax." Based on this, engaging in fake orders constitutes false sales and does not fall under taxable activities, and therefore does not generate value-added tax obligations. According to Article 6 of the "Corporate Income Tax Law," "Income obtained by enterprises in monetary or non-monetary forms from various sources constitutes total income." Therefore, for something to be considered income under tax law, the economic benefit must ultimately flow into the enterprise and result in an increase in the owner's equity. When cross-border e-commerce platforms receive income from fake orders, the funds are transferred back to the person conducting the fake orders, meaning the economic benefit inflow is temporary and will ultimately flow out of the enterprise. As such, the inflow of income from fake orders constitutes other payables, which is a liability of the enterprise rather than income, and does not generate corporate income tax obligations. If a cross-border e-commerce platform wishes to deduct this portion of income, it must proactively provide evidence to the tax authorities. Prepared documentation should include the fake order service agreement, bank receipts of transfers to the personnel conducting the fake orders, logistics documents such as empty package courier receipts for false shipments, and refund records of the fake orders. It should be noted that if the cross-border e-commerce platform cannot provide valid evidence, the tax authorities will treat income from fake orders as taxable income and require payment of the corresponding taxes.
Q&A 6: Will cross-border e-commerce paid export generate any tax obligations?
Under the paid export model, the key issue is that the actual exporter of goods differs from the customs declaration entity. When cross-border e-commerce platforms export goods through paid export, they do not report the export sales under the VAT exemption, deduction, or refund mechanism in the VAT return, nor do they report the taxable goods sales, naturally causing discrepancies with the sales revenue data submitted by foreign platform enterprises. This can trigger alerts and requires explanation to the tax authorities without a valid reason. Moreover, starting from October 2025, the "Announcement of the State Administration of Taxation on Optimizing Matters Related to Prepaid Corporate Income Tax Declarations" (Announcement No. 17, 2025) will be officially implemented. Article 7 explicitly requires that when agent exporters submit prepaid tax declarations, they must report the basic information and export amounts of the actual principal. This new regulation restricts the paid export model from a regulatory perspective. On one hand, if the agent fails to report accurately, the tax authority will treat the transaction as self-operated, making the agent responsible for corporate income tax payment. On the other hand, for cross-border e-commerce platforms using the paid export model, the new regulation will pinpoint the actual owner through information transparency. Thus, in the case of paid exports, according to Article 7, Paragraph 1, Item (i) of the "Notice of the Ministry of Finance and the State Administration of Taxation on Policies for Value-Added Tax and Consumption Tax on Exported Goods and Services" (Caishui [2012] No. 39), and Article 11, Item 7 of the "Administrative Measures for VAT and Consumption Tax on Exported Goods and Services" (Announcement No. 24, 2012 of the State Administration of Taxation), income obtained by cross-border e-commerce from this portion will be treated as domestic sales for tax purposes. If the tax authorities determine that the cross-border e-commerce platform intentionally evaded taxes, it may also be considered tax evasion and be subject to fines.

Q&A 7: What should be done if normal mode exports cannot get tax refunds due to the lack of retained registration documents and other materials?
It is necessary to clarify the reason for not retaining the registration documents. If it is due to forgetfulness or loss, the company should review internal financial and business records to recover the original documents such as purchase contracts, marine bills of lading, and consignment customs declaration agreements. These should be organized in chronological order according to the tax refund declaration timeline, and the "Export Goods Registration Document Catalog" should be filled in. The company should actively explain the situation to the tax authorities, provide the completed documents, and apply for re-processing the tax refund. If the FOB export mode was used and the bill of lading could not be obtained, explanation can be made to the tax authorities based on Article 5, Item 8 of the "Measures for the Administration of VAT and Consumption Tax on Export Goods and Services (State Administration of Taxation Announcement No. 12 of 2013)," clarifying the characteristics of the transaction method for the exported goods. If the relevant registration documents were not obtained, a tax refund can be lawfully applied for.
Q&A 8: What should be done if no input invoice was received for goods purchased from a supplier?
For domestic purchases of goods, invoices are used as proof for deductions and exemptions. For general taxpayers engaged in cross-border e-commerce, they should proactively contact the supplier to negotiate the issuance of supplementary invoices. If the supplier is a small-scale taxpayer, they can be asked to apply to the tax authorities for a special invoice to be issued on their behalf. Otherwise, the related costs will be difficult to deduct before tax and cannot be used for input VAT deduction.
Q&A 9: For cross-border e-commerce operated as a sole proprietorship using the personal account of the operator for payments and leaving funds abroad, are there any tax risks?
Under the CRS mechanism, foreign competent tax authorities regularly exchange tax-related information of the operator's bank accounts with the Chinese tax authorities. The tax authorities can accurately obtain tax data of residents' foreign accounts and require operators to make supplementary tax payments. Additionally, if cross-border e-commerce operators use personal accounts for such transactions without reporting and paying taxes, this may constitute tax evasion by not recording income in the books, facing fines ranging from 0.5 to 5 times the underpaid taxes.
Q&A 10: Will the tax authorities retroactively investigate cross-border e-commerce income prior to the third quarter of 2025?
According to State Taxation Administration Announcement No. 15 of 2025, overseas platform enterprises only need to report cross-border e-commerce sales revenue data on a quarterly basis after the new regulations come into effect, with the first report being the third quarter of 2025 data. There is no need to retrospectively report previous stock data. Therefore, in normal circumstances, the tax authorities will not conduct concentrated inspections or collect taxes on cross-border e-commerce income before the third quarter of 2025. However, it should be noted that according to Article 52 of the Tax Collection and Administration Law, if there is tax evasion by cross-border e-commerce operators, the tax authorities can pursue underpaid taxes indefinitely. In such cases, the tax authorities may examine the income of cross-border e-commerce operators prior to the third quarter of 2025.

III. How Can Cross-Border E-Commerce Ensure Tax Compliance?
(i) Optimize Business and Tax Structures to Reduce Compliance Costs
Adapt the export model according to your scale.Small cross-border e-commerce businesses can adopt the 1039 market procurement trade model, which does not require invoices from suppliers, and single customs declaration amounts under $150,000 are exempt from VAT. Medium-sized cross-border e-commerce businesses can choose the export tax-exempt model, using supplier invoices and the 0110 general trade customs declaration method to enjoy VAT exemptions and small and micro enterprise income tax incentives. Large cross-border e-commerce businesses with higher annual revenue can establish an export tax rebate structure, use VAT special invoices issued by suppliers, comply with customs declaration procedures, and apply for tax rebates to reduce overall tax burdens.
(ii) Establish a Regular Self-Inspection System to Build a Long-Term Risk Prevention Mechanism
Regularly compare sales data from overseas platform companies with tax filing data, review business models, and develop fixed self-inspection procedures for finance and taxation. Systematically archive documents from each step, including procurement, customs declaration, and fund receipts, to ensure the authenticity and traceability of business activities. Also, avoid private account receipts or income splitting practices to prevent being classified as tax evasion.
(iii) Actively Communicate with Tax Authorities and Hire Professional Tax Advisors if Necessary
For discrepancies between the revenue data reported by overseas platform companies and tax filings, promptly provide supporting documents, focusing on the points: "difference amount — cause — corrective measures" to explain the situation to the tax authorities. In cases of complex, difficult, or suspected tax evasion issues, it is recommended to hire professional tax advisors to help cross-border e-commerce businesses understand tax policies, organize supporting materials, and form a complete evidence chain to engage effectively with tax authorities on core issues such as legal applicability and fact determination.