China orders sales data from e-commerce giants to combat tax evasion: Bloomberg

The State Taxation Administration has ordered e-commerce giants to submit sales data for the first time, including Amazon, in bid to crack down on tax evasion by merchants using online platforms for cross-border business, Bloomberg reported. 

It is reported that tax authorities across China have required major platforms to report the third-quarter revenue of some Chinese merchants in an effort to curb underreporting of sales in recent months. 

Amazon began sharing its data in mid-October, while competitors like Alibaba (9988)’s AliExpress, Pinduoduo’s Temu, and SHEIN also started submitting information after being requested. 

No allegations of wrongdoing have been made against these platforms, according to the State Taxation Administration.

It is understood that the information allows Chinese regulators to gain a better understanding of the sales figures of online exporters, whose actual sales are often far higher than the figures they report to the tax authorities.

If sellers adjust their declarations to match platform data, companies with annual sales exceeding 5 million yuan (HK$ 5.46 million) could face value-added tax rates of up to 13 percent along with corporate income taxes, significantly eating into their profits.

Merchants can only be exempt from this tax if they can provide customs clearance documents and other export proof, which is difficult for most online sellers under their current business structure. 

An Amazon spokesperson stated that the company "complies with all applicable laws and regulations in every country where we operate."