Tax audits are becoming stricter in the second half of the year. But before that, there’s a more fundamental question that needs to be answered: How much tax should you actually be paying at each stage?

Many sellers have no idea how much tax they owe. It’s not that they don’t want to calculate it—it’s that they don’t know how. Value-added tax, corporate income tax, and personal income tax—these three tax categories are all interconnected. If you overlook even one of them, the actual amount you end up with will be significantly lower.

Today, I’ll use a set of verifiable figures to break down the entire tax chain.

💡 Not sure how much tax you should pay at each stage or how much you can save on taxes?Cell phone: 18676749275 ｜ WeChat: qcygscszk(math.) genusText 【Tax Burden Estimate】 to receive a free end-to-end tax assessment.

01 First, let’s look at the big picture: How did 50 million in revenue turn into 3.6 million?

Using the operating data from July through December 2025 of a typical cross-border e-commerce company as a model:

A profit of 6 million—that looks pretty good.

Keep reading—Value-Added Tax, Corporate Income Tax, and Individual Income Tax: three tax categories await.

02 The First Cut: Value-Added Tax—0 yuan if compliant, 6.5 million yuan if non-compliant

Value-Added Tax (VAT) is a significant tax burden for cross-border e-commerce businesses.The First Turning PointThe

Core rules:

• Compliant customs clearance for exports, holds import/export qualifications, and has applied for tax refunds or exemptions → 13% VATFull Exemption
• No customs declaration; classified as domestic sales → Coded as 13%Pay in full

Two sets of results for the 50-million-sample model:

This is not a difference that can be ignored—6.5 million is the largest single cost in the entire tax chain.

A reality we must face: There is still room to proactively review and standardize past data on export transactions settled through third-party invoices. But this window of opportunity won’t last forever. If we delay until 2027 or 2028 and are discovered during an audit, the authorities will no longer consider costs or calculate profits—instead, we’ll be required to make full back payments based on total revenue. The alternative is either a flat-rate assessment at 1 percentage point or a full audit at 13 percentage points—both of which entail extremely high costs.

VAT in a nutshell: If you file your customs declaration in compliance with regulations, you’re exempt from tax; if you don’t, the first penalty will be 6.5 million.

📌 Not sure if your export customs clearance process is compliant?Cell phone: 18676749275 ｜ WeChat: qcygscszk, text 【Customs Declaration Diagnosis】 to get a free assessment.

03 The Second Cut: Corporate Income Tax—The 3 Million Threshold: Profits Jump as Soon as They Hit It

There is a “cliff” in the corporate income tax rules:

Note: The portion exceeding 3 million is taxed at 25%—that is,Full amount at 25%. On 3 million in profits, you pay 150,000 in taxes; on 3.01 million in profits, you pay 752,500. An extra 10,000 in profits means an extra 600,000 in taxes.

Back to the 50 million model:

Out of 6 million in pre-tax profit, 1.5 million is deducted at the corporate level first.

Here are two practical tips that many sellers aren’t aware of:

First, bills from overseas platforms can be fully offset. Commissions, advertising fees, and warehousing fees from Amazon, TikTok Shop, and Temu—as long as you can provide invoices—can all be deducted as business expenses. Although the tax authorities have a rule limiting advertising fee deductions to 15% of gross revenue, they do not strictly enforce this ratio in the actual operation of cross-border e-commerce.

Second, domestic costs must be supported by invoices. Factory purchases, office rent, employee salaries—you can only claim these as tax deductions if you have invoices. The tax authorities won’t recognize costs without invoices. Many sellers “don’t get invoices for purchases, don’t have rental contracts, and don’t report salaries,” resulting in insufficient costs on their books and artificially inflated profits. The extra taxes they end up paying far exceed the small amount they save on invoicing costs.

Corporate Income Tax in a Nutshell: Once profits exceed 3 million, the tax rate is 25% + 1% + 3%. The only way to reduce the tax burden is to ensure that costs are “supported by invoices.”

04 Third Cut: Personal Income Tax—An Additional 20% Withheld from Shareholder Dividends

After paying corporate income tax, 4.5 million remained.

If this 4.5 million were to be distributed as dividends to individual shareholders:

50 million in revenue → 3.6 million in net proceeds. From a business perspective, this means the profit margin of 12% has turned into a net return rate of 7.2%.

Income tax on wages and salaries hasn't been calculated yet. Many cross-border e-commerce business owners report their employees’ wages at the minimum required level—or fail to report them at all. Against the backdrop of the “Golden Tax Phase IV” initiative and the full-scale push of platform data, discrepancies between social security and individual income tax filings and bank transaction records are the first areas that tax auditors target.

Personal Income Tax in a Nutshell: Just because you’ve paid your corporate taxes doesn’t mean the money is in your pocket yet—there’s still the 20% withholding tax on dividends. Personal income tax planning relies on strategic structuring, not on coming up with solutions only when dividends are paid out.

05 Three Strikes: Understanding Compliance vs. Non-Compliance Through a Set of Numbers

After three strikes, the conclusion is clear:

• value-added tax (VAT): Tax-Exempt Exports Through Customs Declaration
• corporate income tax: Through cost invoice deductions
• personal income tax: Reducing the Workload Through Architectural Planning

If any one of these elements is missing, the burden of the other two tax types will increase.

06 What Are the Focus Areas for Audits in the Second Half of the Year?

By 2026, Phase IV of the Golden Tax System had already completed the integration of the three major data sources for cross-border e-commerce:

• Platform Transaction Data (Amazon, TikTok, Temu, etc.)
• Funds Transaction Data (Third-Party Payment Platforms + Bank Accounts)
• Customs Clearance and Logistics Data (Customs Declarations + Logistics Tracking)

Cross-referencing the three sets of data yields only one result: the gaps in revenue, costs, and cash flow are immediately apparent.

In the second half of the year, auditors won’t ask, “Do you have any issues?”—they’ll come straight to you with the data discrepancies and ask you about them.Why is there such a big difference?The

By then, it won’t be a question of “whether I want to comply,” but rather “whether I still have time to get my books in order.”

The most important thing to do right now is to take three minutes to check yourself:

1. Do you handle your exports through compliant customs clearance or by purchasing the export?
2. Are there invoices for all cost items, such as factory purchases, rent, and wages?
3. Have you organized all the commission, advertising, and warehousing invoices from overseas platforms?
4. Has your annual profit exceeded 3 million? If so, have you done any tax planning?
5. Has a tax planning structure been established for shareholder dividends?

See if this applies to you:

• If 1 = export sales and 4 = profit exceeded the threshold → dual risk of VAT and corporate income tax; the sooner you take proactive steps to comply, the lower the cost.
• If 2 = Incomplete invoices → Your reported profit is higher than the actual profit, and you’re paying more tax to the tax authorities than you should.
• If you're unsure about any of the above → It's best to first figure out exactly how much tax you owe.

Send us your revenue figures and cost structure, and Qicaiying will help you calculate your taxes end-to-end—understanding your tax burden is just the first step; knowing how to reduce it is the ultimate goal.

Cell phone: 18676749275 ｜ WeChat: qcygscszk

Enterprise Finance Group

Founded in 2015 and headquartered in Shenzhen, we specialize in cross-border e-commerce tax and financial compliance, business registration, bookkeeping services, overseas company registration, and ODI filing services. We provide one-stop solutions ranging from customs clearance and export tax rebates to company registration, bank account opening, and cross-border structuring planning. Before the audit window narrows in the second half of the year, we offer free tax burden calculations and risk assessments to help you understand your current situation.

• ✅ End-to-End Guidance on Export Tax Rebates: Bringing VAT Compliance to Zero
• ✅ Cost Invoice Management: Ensure that every cost is fully documented
• ✅ Corporate Income Tax Planning: Be Prepared Before Profits Exceed 3 Million
• ✅ Design of a Shareholder Dividend Structure: Mitigate the impact of the 20% individual income tax
• ✅ Responding to Data Comparisons Under the Fourth Phase of the Golden Tax System: Identify discrepancies early and take proactive corrective action