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According to the National Bureau of Statistics of China, total e-commerce transaction volume in 2024 was about RMB 46.41 trillion, with online retail sales reaching roughly RMB 15.23 trillion. As China's digital economy expands rapidly, differences in tax administration between digital and traditional sectors have raised equity concerns. To address these issues, the State Council promulgated the “Tax-related Information Reporting Rules for Internet Platform Enterprises” (the “Regulation”) on June 20, 2025, effective immediately.

Since January 1, 2019, China's E-Commerce Law has obliged e-commerce platform operators to submit identity and tax-related information of on-platform business operators and to remind those without commercial registration to register for tax purposes. However, without detailed implementing rules, enforcement was limited, contributing to de facto tax underpayment. The newly issued Regulation further tightens administration by explicitly reinforcing internet platform enterprises' reporting obligations.

Under the E-Commerce Law, “e-commerce platform operators” are entities providing, in the course of e-commerce activities, online premises, transaction matching, information dissemination, and similar services to two or more parties to facilitate independent transactions. The Regulation further broadens this concept by defining “internet platforms enterprises” to encompass not only traditional e-commerce platform operators but also other entities that offer comparable for-profit services for digital transactions, covering platforms like social media or content services with commercial features. Importantly, overseas platforms offering profit-seeking services in China must also report, though the precise scope of “in China” awaits clarification.

Firstly, internet platforms enterprises must submit their basic information to the tax authority within 30 days of the Regulation taking effect or starting operations. Thereafter, on a quarterly basis, internet platforms enterprises are required to report identity and income information of on-platform business operators and individuals, with the first report due in October 2025 covering Q3 2025. Information predating the Regulation's effective date does not need to be reported. Platforms are required to verify that submitted information is true, accurate, and complete; once this verification duty is fulfilled, they are not liable for errors caused by on-platform operators or individuals.

Exemptions apply in two cases: (1) for convenience-based labor (such as delivery, transportation or housekeeping) that enjoys tax preferences or is not subject to tax, and (2) where the internet platforms have already handled withholding or proxy filings on behalf of on-platform operators or individuals.

Noncompliance may result in orders to correct within a specified period, and fines ranging from CNY 20,000 to 100,000 if not rectified. In severe cases, platforms may be suspended for rectification and face higher fines of CNY 100,000 to 500,000, in line with the penalties prescribed under the E-Commerce Law.

While substantive tax rules stay the same, the new Regulation intensifies enforcement efforts to promote fairer and more efficient taxation. Mandatory reporting is expected to reduce hidden or under-reported income, especially on emerging internet platforms and among C2C operators, reinforcing horizontal equity.

The Regulation now covers not only traditional e-commerce but also a wide range of internet platforms, including overseas services targeting China, though its exact territorial scope is still unclear. Stakeholders should promptly update systems and processes, monitor guidelines and seek professional advice to ensure compliance.