Recently, the biggest news in the cross-border industry has broken.

On April 23, the State Administration of Taxation officially clarified the guidelines for the collection and administration of income tax on cross-border e-commerce.Many sellers haven’t yet realized that this change isn’t just a matter of “how to pay taxes,” but rather:The cross-border industry has officially bid farewell to the era of unregulated growth.

Over the past few years:

• Private Card Collections
• buy orders to sell goods (e.g. for export)
• Multi-subject splitting
• Extracorporeal Circulation
• Opportunity Cost

These “unwritten rules” of the industry will become increasingly difficult to follow in the future.

Below, we’ll explain what this new policy actually means in the simplest and most practical terms so everyone can understand it at a glance.

"one" radical in Chinese characters (Kangxi radical 1),Key Change: The State Has Officially Clarified the Tax Administration Framework for Cross-Border E-Commerce Income Tax

This policy actually sends three very important signals:

First: Historical issues can be resolved at low cost.

This is currently the biggest benefit for cross-border sellers.

For:

• Business Through 2025
• Unable to fully account for costs
• Historical accounting records are not in compliance with standards
• There is a shortage of tickets

Officials have clarified that the “fixed-rate taxation” method may be used to handle historical cases.

In addition, the 2% taxable income rate applies until September 30, 2025.

What does that mean?

Simple to understand:

Assume the company has annual sales of 10 million.

In the past, many sellers were most concerned about:

“If we’re audited, will we have to pay back taxes based on the high profit margin?”

However, based on the 2% taxable income rate:

• 10 million in sales
• Taxable income of only 200,000

When combined with the preferential policies for small and micro enterprises,

The actual tax burden will be much lower than many sellers expect.

Second: The window of opportunity is running out

Many people think that:

“The rest should be pretty much the same.”

But actually:

The policy has clearly been tightened in phases.

October–December 2025: The taxable income rate will be raised to 4%.

In other words: the cost has effectively doubled.

But the real key point is: Starting January 1, 2026,The system will fully transition to audit-based taxation.

二,Starting in 2026, the cross-border industry will officially enter the “era of audit inspections.”

That means:In the future, the tax framework for cross-border e-commerce will gradually align with that of domestic formal trade.

Simply put: Taxes are calculated based on actual profits.

In other words:

• incomes
• (manufacturing, production etc) costs
• cost
• Profit

All of this must be supported by complete documentation.

For many sellers,
It will be a huge change.

Because in the past, the industry was rife with:

• Private Card Collections
• buy orders to sell goods (e.g. for export)
• Multi-entity Idling
• Off-Balance-Sheet Funding Cycle

In the past, there were many issues,
Essentially: It can't be found.

But in the future, as:

• Golden Tax IV, the fourth installment of the tax system
• Platform data interconnection
• Transparency in Cross-Border Payments
• Enhanced Oversight of Bank Transaction Records

Cash flow, goods flow, and document flow,
A complete closed-loop system is gradually taking shape.

What many sellers really need to realize is:The biggest risk in the future isn’t high taxes, but an inability to account for expenses clearly.

surname San,The biggest piece of good news this time: Overseas certificates are now officially recognized

This, in fact, is what really mattersWhat many cross-border sellers should really be focusing on.

Because the biggest headache for everyone in the past was:

“Many of the overseas expenses don’t have domestic invoices.”

For example:

• Overseas Invoice
• Platform Statements
• Overseas Shipping Costs
• advertising cost
• Payment Platform Records

Before:

Many sellers are concerned that:

“Are these actually tax-deductible?”

The biggest change this time is that overseas certificates are now officially recognized.

In other words: as long as a reasonable business workflow can be established,

Many overseas expenses can be used as the basis for pre-tax deductions in the future.

This means that the cross-border industry has truly entered a phase where transactions can be audited.

The biggest obstacle to auditing in the past is now being overcome.

四,“The ”Saiwei Model” Has Been Clearly Defined for the First Time, Finally Providing a Compliance Path for Multi-Store Operations

There is another key focus area that has drawn significant attention from the industry this time:

The "one entity, multiple stores" model has been officially endorsed.

In the past, many cross-border sellers:

• A team operating multiple stores
• Profit Splitting Among Multiple Entities
• Frequent switching of store subjects

The main reason is actually quite simple: they don’t know what constitutes compliance.

But this time,The authorities have set a clear direction:

Under the same operating entity:

• Costs can be consolidated
• Allocate expenses based on revenue share
• Each store must file its own report

It also clarifies that the entity registered on the platform is the statutory taxpayer for income tax purposes.

This means that in the future:

• Shell Entity
• Off-Balance-Sheet Profit Circulation
• Hiding the Actual Operating Entity

It will get harder and harder.

But on the other hand, the path to compliance has finally become clear.

Many sellers will no longer need:

• Frequent Demolition of the Main Structure
• Hiding Profits Everywhere
• Constantly Changing Jobs

Instead, it can achieve truly long-term, stable operations through a well-designed structure.

五,Why are more and more sellers taking the initiative to ensure financial and tax compliance?

Because the industry has already begun to shift from:“Traffic Competition”

Enter:“Competition in Compliance.”

In the past, many people competed by:

• a commercial
• product selection
• flux

But the sellers who will truly be able to grow their businesses in the future,

You must also have:

• Financial and tax capacity
• organizational capacity
• Globalization capacity
• Risk Management Capabilities

Especially for:

• Higher annual sales
• Multi-Store Operations
• There are overseas entities
• Long-term brand building

For sellers,

Finance and taxation are no longer just “back-office issues.”

Rather, it is the core capability that determines whether a company can achieve long-term growth.

6,The most important thing right now isn't “whether we can still hide”

Rather, the question is: How can we complete the standardization process at the lowest cost within the designated timeframe?

For many sellers, the biggest problem right now isn't:

“Should we comply?”

Instead:

“By the time an investigation actually begins, it may already be too late to take advantage of the most cost-effective resolution phase.”

Because once it's in:

• sampled
• Under close surveillance
• Subject to a retrospective review

Follow-up:

• pay a tax one has evaded
• overdue fine
• fine (monetary)
• Business Risks

will increase significantly.

As a result, many established sellers have recently begun making early preparations:

• Reviewing Historical Transactions
• Supplementary financial system
• Update Store Entity
• Regulating financial flows
• Establishing a Long-Term Tax Structure

Because everyone realizes that:The biggest benefits in the cross-border industry in the future will go to those who ensure compliance early on.

"END"

Final thought: Before 2020, the biggest advantage in the cross-border industry was the lack of comprehensive regulation. After 2026, however, the industry’s true advantage may shift to this: while most people haven’t yet begun to comply with regulations, you’ve already completed your compliance preparations ahead of the curve.

return (to a previous condition)[Cross-border e-commerce tax complianceWe will arrange a tax consultant to do a one-on-one risk diagnosis for you free of charge and generate a 2026 Cross-border E-commerce Compliance and Rectification Program exclusively for you.