Golden Tax Phase IV is the fourth-generation tax collection and management system promoted by the State Taxation Administration. Its core objective is to achieve “comprehensive data, comprehensive operations, and comprehensive processes” for taxes and fees, shifting tax administration toward “data-driven tax governance.” It is not merely a “tax system,” but rather a “joint regulatory platform.” The key change is the integration of information from multiple departments—including industry and commerce, banking, social security, customs, market regulation, housing and urban-rural development, and public security—to form a comprehensive “enterprise + individual” data network.

01 Golden Tax Phase III vs. Golden Tax Phase IV: Key Differences

▪ Scope of Monitoring: Phase III primarily covers internal data within the tax system; Phase IV integrates cross-departmental information from the Administration for Market Regulation, banking, social security, customs, housing and urban-rural development, public security, and other agencies.

▪ Analysis Dimensions: Phases 1–3 focused primarily on invoices and tax filings; Phase 4 added bank statements, social security contributions, logistics records, electricity consumption, and e-commerce platform transactions to build a comprehensive data profile.

▪ Scope of Regulation: Phase III focused primarily on enterprises; Phase IV looks beyond enterprises to include individuals as well, leaving no room for related-party transactions or payments into private accounts to go unnoticed.

▪ Early warning efficiency: Phase III relied on manual spot checks; Phase IV uses intelligent comparison, resulting in a more than 10-fold increase in identification efficiency.

02 What Does Phase IV of the Golden Tax System Mean for Businesses?

For businesses, tax compliance is the only way forward under the “Golden Tax Phase IV” initiative. By integrating data from multiple departments, a "comprehensive data profile" of each business has been established:

▪ Scope of Data Included: Tax data (invoices, tax returns, tax payments), bank statements, social security contributions, logistics records, electricity consumption, e-commerce platform transaction data, and more are all included in the analysis to verify the authenticity of business operations.

▪ There’s no hiding personal account receipts: Actions such as “failing to record WeChat/Alipay payment receipts” and “receiving payments into personal accounts” will be quickly identified by the system through data comparison.

▪ Thorough scrutiny of related-party transactions: Related-party relationships and transaction counterparties are also subject to thorough scrutiny to prevent the transfer of profits through related-party transactions.

▪ Stricter Penalties: The efficiency of identifying common violations has increased more than 10-fold. Once an alert is triggered, tax authorities will conduct a prompt investigation, and companies will face “back taxes + late payment penalties + fines.”

▪ Increased Consequences for Tax Credit: Companies that violate regulations may be downgraded to Grade D, resulting in restrictions on obtaining invoices, ineligibility for tax incentives, difficulties in obtaining bank loans, and disqualification from bidding on government contracts.

03 How Should Companies Ensure Tax Compliance Under the "Golden Tax Phase IV" Initiative?

Enterprises are the primary focus of supervision under Phase IV of the Golden Tax System. Compliance must span the entire “business—finance—tax” chain, with a focus on resolving the three major issues of “data inconsistencies, process loopholes, and non-standardized filings”:

● “Alignment of the Four Flows”: The Core Bottom Line for Business Authenticity

▪ Contract flows, invoice flows, fund flows, and logistics (goods flows) must be consistent and traceable. For example: An e-commerce seller’s shipping tracking number, the buyer’s payment account, the invoice recipient, and the party named in the sales contract must all correspond to the same customer.

● Strengthen the standardization of financial accounting to ensure that data is accurate and traceable

▪ Use compliant financial software to avoid keeping a simple ledger. Cross-border e-commerce businesses must account for revenue and costs separately by platform, site, and store, and retain platform settlement records.

● Tax and Fee Filing Compliance: Avoid Alerts Caused by “Inconsistencies in Reporting Criteria”

▪ The revenue reported for VAT purposes, the revenue reported for corporate income tax purposes, and the actual revenue recorded in the e-commerce platform’s backend must be logically consistent. Discrepancies beyond a reasonable range will trigger a system alert.

● Compliance with Related-Party Transactions

▪ Transfer pricing between affiliated companies must comply with the arm’s-length principle; maintain documentation of pricing rationale and market comparables. Avoid transferring profits through entities with low tax burdens.

04 “Tips” for Tax Compliance”

▪ Documents to Retain for Reference: All tax-related documents (contracts, invoices, shipping documents, bank statements, meeting minutes) should be retained so they can be quickly provided during a tax audit. It is recommended to file them by year and by type.

▪ Professional Support: For complex business matters (such as related-party transactions, applications for tax incentives, and equity transfers), you can consult relevant financial and tax institutions for professional advice to avoid violations resulting from “erroneous self-assessments.”

05 What Can We Do for You?

Whether you’re facing challenges with tax filing, have an unclear business structure, are dealing with disorganized accounting, or have received tax alerts from your platform, we can provide you with compliant solutions. The Zhengshui team has extensive experience serving businesses and e-commerce sellers and can assist you with tax filing, standardizing your accounting practices, identifying tax risks, and establishing a compliant structure.

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The articles on this official account are provided for cross-border compliance reference only; please consult a professional advisor for specific tax treatment.

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