Tax Compliance Has Become A Major Issue For Cross-border E-commerce.

Tax compliance has become a major issue for cross-border e-commerce.

 

When it comes to the key word for the cross-border e-commerce industry in 2025, "tax" is undoubtedly one of them.

On the one hand, the unilateral tariff measures introduced by the United States and the ongoing adjustments to these measures are increasing the uncertainty of the market environment.

On the other hand, tax supervision has been continuously strengthened in various regions of China and around the world, ranging from EU value-added tax to domestic "pay-as-you-export" tax policies... Under the regulatory storm in the industry, tax compliance has become an inevitable survival issue for enterprises when they go global.

 

The global trend towards tax transparency is accelerating.

Over the past decade, the cross-border e-commerce industry has experienced explosive growth, and tax operations have been in a "grey area" for a long time. This situation was formed due to both the characteristics of the industry's early development and the incomplete global regulatory system - in order to seize the huge profit space behind the prosperity, many enterprises took risks by exploiting customs regulatory loopholes and corresponding tax incentives.

Therefore, whether from an international perspective or a domestic one, it is inevitable for governments of various countries to strengthen tax supervision.

Internationally, as global economic pressure increases, countries have strengthened their taxation and tax supervision of cross-border enterprises, which has become an effective way to alleviate fiscal pressure.

Take the United States as an example. As AMZ123 mentioned in a previous article, since the implementation of the tariff increase policy, the United States has gradually intensified the inspection of Chinese export goods. Recently, the US Customs discovered through the "Enforcement and Protection Act" (EAPA) that more than 400 million US dollars in unpaid trade tariffs had been found, among which 250 million US dollars of unpaid tariffs came from 23 Chinese shell companies.

 

According to the report of the US Treasury Department, thanks to Trump's tariff policies, in June 2025, the customs tariff revenue of the United States reached 27.2 billion US dollars, setting a new monthly record in history.

From a domestic perspective, in the context of increasingly prominent structural contradictions in fiscal revenue and expenditure, and with the increasing number of cross-border e-commerce entities, tax compliance has become an urgent matter.

 

The export tax rebate data released by the State Taxation Administration shows that from 2021 to 2024, the annual growth rate of export tax rebates handled by the national tax authorities averaged 6.6%. On a comparable basis, the growth rate further increased to 7.1% in the first half of 2025, reflecting the strong resilience of China's foreign trade exports under the complex circumstances.

However, due to the relatively low market entry barriers and fewer policy restrictions, a large number of enterprises have entered the foreign trade market. The number of cross-border e-commerce entities is excessive, and the industry is mixed with various quality levels. Some non-compliant enterprises have taken advantage of the favorable policy of export tax rebates to defraud taxes, seriously disrupting the market order. According to incomplete statistics, in 2023, the tax authorities across the country publicly disclosed 317 major tax violation cases involving tax fraud and export tax rebates.

 

In 2025, despite the impact of unfavorable factors such as changes in tariffs, the number of registered cross-border e-commerce enterprises in China still reached a peak. Data from Qichacha shows that as of May 30th, there were a total of 28,900 "cross-border e-commerce" related enterprises in China. In the first four months of 2025, 5,080 new cross-border e-commerce enterprises were registered, with a year-on-year growth rate of 173.24%, which exceeded the 47.43% growth rate of the entire year of 2024.

 

 

In this context, in order to ensure the orderly development of the industry, tax inspection actions have been continuously strengthened in multiple regions such as Shenzhen, Shandong, Liaoning, and Henan. Several cases related to tax violations have been publicly disclosed, involving entities such as international online business sellers and foreign trade manufacturing enterprises, covering multiple fields including toys and electronic products. Many of the involved enterprises were fined heavily, and those with serious circumstances were even held criminally responsible.

 

In July 2025, an electronic communication enterprise in Liaoning Province was ordered to return 212 million yuan for the fraudulent export tax rebates and was also fined one times the amount. In the same month, three enterprises in Shandong Province were found to have fraudulently obtained export tax rebates through improper means. They were required to return 631.4 million yuan and the relevant personnel were sentenced to prison terms and fined a total of 632 million yuan...

In August this year, a tax fraud case involving "new three items" exports that was disclosed by the Shenzhen Tax Bureau also sparked heated discussions within the industry: A certain company in Shenzhen, which was an affiliate of a number of enterprises including a new energy technology company, etc., defrauded export tax rebates by issuing false invoices under the guise of "lithium batteries" that were eligible for tax rebates. They were ordered to return the 149 million yuan of tax fraud and were also fined one times the amount. The main offender and 18 other involved individuals have now been sentenced to prison terms and fines.

 

An industry insider stated outright that a current problem in the market is that some newly added overseas businesses do not contribute to tax revenue. As a result, the GDP is increasing while overall tax revenue is declining. This is likely to lead to tax injustice and impose greater competitive pressure on traditional industries.

An insider also disclosed that these export tax fraud cases under investigation are just the beginning. Our country is currently conducting a comprehensive rectification campaign. With the implementation of multiple new tax regulations and the maturity of the tax information exchange system (CRS), the wealth distribution of cross-border enterprises will become more transparent.

 

 

Cross-border e-commerce tax compliance is evolving from an "optional" matter to a "mandatory" issue that is crucial for the survival of enterprises.

In 2025, a series of new tax regulations were successively introduced both domestically and internationally, significantly raising the tax compliance requirements for cross-border enterprises. Especially in China, announcements such as "Announcement No. 15 of 2025" and "Announcement No. 17 of 2025" followed one after another, causing a huge stir within the industry.

Firstly, the "Announcement No. 15 of 2025" was released in June this year. The announcement stipulates that regardless of whether it is a domestic e-commerce platform or a cross-border e-commerce platform such as Amazon or Temu, as long as they provide services to Chinese sellers, they must legally submit tax-related information (for details, see "Decided! Cross-border platforms need to report taxes, and seller information will be regularly reported") The first data submission time is October 2025.

In July, the "Announcement No. 17 of 2025" was promulgated, targeting the export process. It stipulated that starting from October 1st, export agency enterprises must simultaneously submit the basic information of the actual export client and the export amount. Failure to accurately submit will be regarded as self-export, and the agency enterprise will bear the full amount of enterprise income tax. (For details, see "Another Tax Regulation Will Be Implemented! Cross-border Export Also Requires Real Name Declaration")

 

The biggest difference from the old regulations lies in this: The "pay for export" model was explicitly prohibited in the past, and the traditional practice of exporting by borrowing others' qualifications is no longer feasible.

 

Recently, some enterprises in Shenzhen that had made zero tax declarations have received reminders from the tax bureau, asking them to explain the situation.

 

Meanwhile, some freight forwarding companies have also issued relevant announcements, requiring sellers to complete the registration of the actual production and sales enterprise of the exported goods and sign the agency agreement before placing the order. It is necessary to clearly define that this production and sales enterprise is the actual exporter for the corresponding export small package business, in order to ensure compliance and avoid affecting the customs clearance process of the export business.

 

 

It is foreseeable that as various new tax regulations are gradually implemented, the requirements for tax declaration and compliance in business operations will continue to increase.

Based on the policies and industry discussions, different-sized cross-border enterprises will face different challenges: For large enterprises, reconfiguring their global tax structure and establishing a comprehensive compliance management system are urgent necessities, but this also presents an opportunity to optimize global tax burdens; for some small and medium-sized enterprises, the compliance costs have significantly increased. If they fail to adjust and respond in time, they will face a survival crisis.

 

In response to the upcoming tax regulations, some sellers in the industry have provided corresponding compliance solutions. Taking the widespread "purchase without invoices" phenomenon in the industry as an example, after the new regulations take effect, enterprises without invoices will face two major challenges: VAT input deduction tax refund and enterprise income tax cost deduction. As a result, their profit margins will be significantly reduced. In response to this, some sellers suggest that they can solve the problem through the tax exemption policy in the pilot zone, "Hong Kong transit trade", and by obtaining invoices through foreign trade comprehensive service enterprises.

 

However, from a practical perspective, these solutions are more applicable to large cross-border enterprises. For instance, "Hong Kong forwarding" involves setting up a subsidiary in Hong Kong for procurement and payment, leaving the unrecorded procurement process to be handled overseas, with the domestic tax obligations and invoicing responsibilities borne by the domestic supplier... This operation requires sellers to carefully select cooperative suppliers and also demands that sellers have sufficient financial resources.

 

At present, many small and medium-sized cross-border enterprises are still in a state of waiting for the policies to be implemented before making further adjustments.

 

There is no doubt that in this transformation, the trend of tax transparency is irreversible, and the cross-border e-commerce industry is moving from unregulated growth to standardized development. As tax supervision becomes increasingly refined, "compliance" has become the top priority that cross-border enterprises need to follow.

 

 

In 2025, the compliance challenges faced by cross-border e-commerce enterprises will go far beyond tax issues. All aspects of the industry are tightening their compliance reviews.

Firstly, there is an increase in product compliance requirements. Taking power banks as an example, international regulations such as the EU CE certification, the US FCC certification, the Japanese PSE certification, and the 3C certification officially implemented in China in August have raised higher requirements for product compliance. In June this year, the recall incidents of power bank products from Romos and Anker Innovation sparked heated discussions in the industry. Currently, Romos has directly halted production and operations.

 

The next aspect is the strengthening of intellectual property protection. Not only have major cross-border e-commerce platforms enhanced the brand registration rules, but also several regions in China have made corresponding adjustments to address the intellectual property risks brought about by the rapid development of cross-border e-commerce.

For instance, in August, the Intellectual Property Bureau of Jiangsu Province released the "Micro Reform Project Implementation List for the Whole Chain Protection of Intellectual Property in 2025", planning to establish a cross-border e-commerce intellectual property risk early warning system in Xiangcheng District of Suzhou, Wujiang District, and Tinghu District of Yancheng.

In addition, the upgrading of customs and logistics supervision in various countries, as well as the increased data compliance requirements for cross-border e-commerce, have also frequently become hot topics in the industry this year, indicating that global supervision of cross-border e-commerce enterprises is becoming stricter.

 

With the advent of the era of comprehensive compliance, the entire ecosystem of the cross-border industry will be reshaped.

Therefore, for cross-border enterprises, it is not only about taxation. Establishing a comprehensive compliance system and integrating compliance awareness into every aspect of the enterprise's daily operations, from procurement, sales to logistics and finance, all require the establishment of standardized procedures. This will provide more opportunities to board the ship that is heading towards the era of "meticulous compliance".

 

In this globalized business environment, compliance in operations has always been the cornerstone for the sustainable and long-term development of enterprises.