Sister Lin, an Amazon seller in Hangzhou, received a system notification in August 2026—the platform had forwarded her sales data to the tax authorities and asked her to verify it for filing purposes. She dug out her records and found that the payments received didn’t match the orders, and her heart sank.

This is not an isolated case.Golden Tax IV, the fourth installment of the tax systemWith the integration of data from platforms, banks, and customs, the era of ”dual accounting” for cross-border sellers is coming to an end. Today, I’ll clarify a few key points.

01

The platform has submitted the data to the tax authorities.

Since the implementation of the Value-Added Tax Law in 2026, major e-commerce platforms—Amazon, Temu, TikTok, Walmart, and Shopee—have been submitting sellers' business data to the tax authorities on a quarterly basis.

In the past, the platform and users kept separate sets of records, but now the two sides are automatically reconciled. The system can instantly compare the amount you reported with the amount the platform actually processed.

The submission requirement does not apply only to large sellers; small and medium-sized sellers are also included. The only difference is who the pop-up targets first.

02

The ”Four-Party Verification” of Phase IV of the Golden Tax System”

Take Hainan’s Phase IV of the Golden Tax System, which went live on August 9, 2026, as an example: data from tax authorities, banks, online platforms, and customs is now integrated in real time, eliminating the need for manual spot checks.

differenceGreater than 5%Pop-up notification,Greater than 30%Designated for priority review,Greater than 50%They may come directly to your doorstep. This is not a campaign-style inspection, but a routine comparison process.

For cross-border sellers, the most critical issue is when cash flow (payment collection) and data flow (orders) are consistently out of sync over the long term—the system flags this as a problem as soon as it runs a comparison.

03

The Most Common Pitfall: Mismatched Tax Bases

Many sellers put ”Amount Received“Declaring ”sales revenue,” but platform orders are reported at full amount. This discrepancy between the two reporting standards is a common source of back taxes.”

There was a case in Shanghai where a company reported approximately 4.3 million based on cash receipts—a figure that differed significantly from the platform’s order data—and was required to undergo a re-assessment. A cross-border company in Xiamen had platform transaction volume as high as 228 million, yet reported only 2,000 based on cash receipts and was found to have concealed income.

Cash receipts are cash flow; orders are revenue. Treating cash receipts as revenue is like setting a trap for yourself.

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04

Three Things You Need to Do Right Now

First.Consistent messaging: Use the full amount of the platform order as the tax base; cash receipts represent cash flow, not revenue, and the two must be recorded separately.

Second.Retention Documentation: Keep a complete set of records for procurement, logistics, platform invoices, and foreign exchange settlement slips on file for at least 10 years so they can be produced upon request.

Third, sellers subject to a review of their accounts should ensure their financial records are in compliance ahead of time—don’t wait until the system pops up a warning to panic. Financial and tax compliance for cross-border e-commerce has gone from an ”optional” requirement to a ”mandatory” one.

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