Sister Wang, who runs a clothing store on Taobao, had always used her personal WeChat account to collect payments without reporting them, thinking, “The platform doesn’t know how much I’m making.” In 2026, she received a text message: “There is a significant discrepancy between the income reported by the platform and your declared income. Please correct this.” Only then did she start to panic.

With the full implementation of the "Golden Tax Phase IV" initiative in 2026, the "Regulations on the Reporting of Tax-Related Information by Internet Platforms" (State Taxation Administration Announcement No. 15 of 2025) require quarterly reporting of revenue generated by business operators on the platforms, thereby narrowing the gray area for payments received through personal bank accounts.

This article clearly explains the platform’s reporting rules, common risks, and compliance pathways—highly recommended reading for small and medium-sized e-commerce business owners.

01

What Is Platform Reporting?

The “Regulations on the Reporting of Tax-Related Information by Internet Platforms” (Announcement No. 15 of 2025 by the State Taxation Administration) will take effect in 2026: E-commerce platforms must report tax-related information—such as revenue and transaction data—for business operators on their platforms to the tax authorities on a quarterly basis, and the tax authorities will use this information to verify the operators’ self-filed tax returns.

Information to be reported: business operator’s identity, income amount, number of orders, etc. The platform does not file your taxes for you, but it does report your “actual revenue” to the tax authorities. If there is a significant discrepancy, the system will automatically send a text message prompting you to correct the information.

In a nutshell: Starting in 2026, online platforms will be your “second tax office.” The tax authorities will be able to view your transaction history on Taobao, Douyin, and Pinduoduo on a quarterly basis, and payments received through personal accounts will no longer be hidden.

02

Three Consecutive High-Frequency Risks

Risk 1: Failure to report payments received through personal accounts. When payment for goods is received via personal WeChat, Alipay, or bank cards but is not recorded in the books or reported for tax purposes, the platform’s reporting system will immediately flag discrepancies, resulting in a determination of tax evasion. This will lead to back taxes, late payment penalties, and fines ranging from 0.5 to 5 times the amount owed.

Risk 2: Purchases without invoices. Upstream small-scale vendors cannot obtain input invoices, resulting in inflated book costs or distorted profit figures, which cannot be adequately explained during an audit-based tax assessment. Risk 3: Failure to withhold individual income tax on commissions paid to live streamers/influencers. Platform service fees are withheld at a rate of 20%–40%, but if influencer commissions are paid from a merchant’s personal account without withholding tax, the merchant bears liability.

These three categories were the most common triggers for e-commerce audits in 2026. With the implementation of the Golden Tax Phase IV system and platform reporting requirements, the old practice of “platforms making money while individuals pocket the profits” has essentially become obsolete.

If you’re facing a similar situation—such as discrepancies between your e-commerce platform’s transaction volume and your tax filings, or concerns about receiving text messages requesting corrections—feel free to scan the QR code to contact Qicaiying’s online customer service (WeChat/Phone: 18620388671). We’ll help you determine whether to opt for a tax assessment or a full audit, and guide you on how to ensure full compliance. Feel free to scan the QR code to contact Qicaiying’s online customer service (WeChat/Phone: 18620388671), and we’ll help you sort out this entire process from start to finish.

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03

Is the fixed-rate tax assessment still a viable option?

With the implementation of the Value-Added Tax Law in 2026, the cost of violating regulations by maintaining small-scale or shell sole proprietorships through tax assessment has increased significantly. Live-streaming, high-gross-margin businesses, and cross-border e-commerce are now prohibited from tax assessment across the entire supply chain and can only be audited.

Still applicable to: Small-scale sole proprietorships engaged in general retail sales of physical goods (apparel, home goods, food) with annual sales of ≤5 million, a long-standing lack of cost invoices, and genuine business operations. However, being subject to a fixed-rate tax assessment does not mean you are exempt from filing tax returns; furthermore, many regions have raised the thresholds and launched large-scale clean-up campaigns starting in July.

Red Lines: Issuing invoices and processing transactions through shell sole proprietorships carries the risk of issuing fraudulent invoices; income split across multiple accounts held by a single individual will be consolidated by the system for tax calculation; if annual revenue exceeds 5 million for more than one year, the business will be mandatorily reclassified as a general taxpayer (13%), and its assessed tax status will be revoked.

04

Four Steps to Implementing Compliance

First, business entity compliance: Register using a genuine sole proprietorship or limited liability company; do not use a shell company. Second, consistency of the “four flows”: Ensure that contracts, funds, invoices, and goods align; retain order screenshots, shipping records, and payment receipts for at least five years.

Third, keep accounts separate: Deposit business revenue into a corporate or self-employed account; do not mix it with personal accounts. Obtain input invoices whenever possible. Fourth, file returns on time: You must file returns whether your taxes are assessed on a fixed-rate basis or based on audited accounts; make sure your books are balanced before submitting your return through the platform.

Starting in 2026, the fixed-rate and audited tax collection methods will be fully phased out in the cross-border e-commerce sector. Tax refunds for overseas warehouses (9810 “tax refund upon departure”) will instead become a key tool for ensuring compliance and reducing costs. Don’t focus solely on “tax savings” and forget about “compliance.”

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05

How to Balance the Books

First, be transparent about reporting: The tax authorities are already aware of the platform’s revenue, and it cannot be hidden in personal accounts. Second, choose the appropriate tax entity: For genuine business entities dealing in small-scale physical goods, a fixed-rate assessment may apply; for all others, an audit will be required.

Third, maintain a chain of evidence: ensure consistency across the four streams of information, retain records for five years, and perform cross-checks. Fourth, calculate the overall figures: compare tax assessments with audit findings, and tax refunds with tax exemptions; optimize within the compliance framework without crossing the red line of issuing fraudulent invoices.

In a nutshell: The fundamental change in e-commerce taxation in 2026 is that “platforms will report revenue to ensure transparency.” Receiving payments through personal accounts has shifted from a “dividend from information asymmetry” to a “target for tax audits”; balancing the books and ensuring the authenticity of cash flows are the keys to long-term security.

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