With 40 million in revenue, yet consistently filing zero tax returns; stores are processing orders normally, but they can’t obtain cost invoices from suppliers; multiple stores share the same account, making it impossible to distinguish between revenue, costs, and inventory…

Situations like this are not uncommon in the cross-border e-commerce industry.

Many sellers used to think:

“I haven’t withdrawn all the money from the platform, so it shouldn’t be that serious.”

“If you don’t have cost invoices, it’s okay to file a zero return for now.”

“Anyway, the stores are owned by different companies, so we can just file them separately.”

However, as the links between tax-related information reported by platforms, corporate tax filing data, and other tax-related data become increasingly tight,Large Cash Flows, Underreporting, Invoicing-Free Costs, and Blurring of Entities...is becoming a key financial and tax risk that cross-border companies need to pay close attention to.

Recently, many cross-border sellers in Shenzhen have begun to refocus their attention on an issue:

If historical accounting records are complex, are there any tax treatment methods more suitable for cross-border e-commerce companies given their specific circumstances?

The answer cannot be simply reduced to “fixed-rate taxation,” but should be considered fromThe company’s actual business operations, historical transactions, cost documentation, export models, and the specific policies and guidelines of the local tax authoritiesComprehensive assessment.

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1,Why do “high transaction volumes combined with long-term zero-reporting” tend to attract attention?

For cross-border e-commerce companies, the greatest risk is often not high sales volume.

Instead:

The platform handles a large volume of transactions, but the company has consistently reported very low revenue—and in some cases, has even filed zero-revenue returns for extended periods.

For example, a company:

The platform's annual turnover is 40 million yuan

But on the balance sheet, long-term:

Zero Reporting / Underreporting

In addition, there are also:

• Large-scale procurement from upstream suppliers without invoices
• Multiple Platforms Sharing the Same Business Entity
• Commingling of Revenues Among Multiple Companies
• Platform payments and corporate bank statements do not match
• Customs declaration data does not match financial data

At this point, the issue facing companies is no longer simply a matter of “how much tax to pay.”

Instead:

Who exactly is entitled to this income?

Where do the costs come from?

How do I export goods?

Where did the money end up?

Why does the platform have revenue, but the company’s books show none?

If these issues cannot be clarified, tax risks will naturally increase.

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2,What many cross-border sellers truly fear isn't the tax rate, but rather “costs without supporting documentation.”

There is a very common reality in the cross-border e-commerce industry:

The goods were sold, but the upstream supplier won't issue an invoice.

Example:

Annual platform sales for the company:

40 million yuan

However, the only procurement costs for which compliance cost documentation can be obtained are:

10 million yuan.

If corporate income tax is accounted for using the audit-based method, the enterprise must recognize revenue, costs, expenses, and taxable income based on actual business operations.

If compliant supporting documentation cannot be obtained for a significant portion of actual operating costs, the following situations may arise:

There is a significant discrepancy between operating profit and costs deductible for tax purposes.

This is what many sellers are really worried about.

Therefore, cross-border businesses cannot just focus on:

“How much income tax do I have to pay this year?”

We should focus more on:

“Can my cost documentation system handle the current volume of transactions?”

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3,What exactly is the “tax assessment” that cross-border sellers often talk about?

First, let’s clear up a common misconception.

Tax assessment is not simply a matter of “multiplying revenue by a certain rate and then having the tax authority collect a fixed amount of tax.”

The assessment method, applicable conditions, scope of assessment, and specific tax rates for corporate income tax must be determined in light ofNature of the business, industry, operating conditions, as well as the specific policies and assessment criteria of the competent tax authorityDetermination.

For certain eligible cross-border e-commerce enterprises with historically complex business operations, it is indeed possible that, during specific periods and under specific policy guidelines, taxable income may be determined based on methods such as the taxable income rate.

Simple to understand:

checking and collecting (accounting)

The key point is:

Revenue – Compliance Costs = Taxable Income

Then, calculate the corporate income tax based on the applicable tax rates and preferential policies.

Approval Method

In that case, it may be done as follows:

Income × Taxable Income Rate = Taxable Income

Then calculate the tax liability based on the applicable tax rates and preferential policies.

Therefore, both approaches are suitable forCross-border Companies with Varying Levels of Cost Document Completeness...the final tax burden may vary significantly.

But please note:

Approval is not something a company can simply implement by choosing a rate on its own, nor is it available to all cross-border e-commerce businesses.

Whether it ultimately applies depends onThe company's actual circumstances and the specific assessment results issued by the competent tax authorityshall prevail.

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4,Why has the claim that “with 40 million in revenue, only tens of thousands in income tax are paid” appeared online?

This is also where many sellers are most likely to be misled.

You often see this online:

“With 40 million in revenue from cross-border e-commerce, income tax is only a few ten thousand.”

When you come across this kind of statement, don’t just apply it blindly.

When actually calculating the tax burden, you must at least consider the following:

Revenue Recognition Criteria

↓

taxable income rate

↓

Taxable Income

↓

Applicable Corporate Income Tax Rates

↓

Are Preferential Policies for Small and Low-Profit Enterprises, etc., Applicable?

↓

The enterprise's final income tax liability

So, when it comes to the claim that “with 40 million in revenue, you only have to pay a few ten thousand,” you must first ask for clarification:

What exactly is 40 million?

• Is it the platform's GMV?
• Or is it the revenue recognized by the company?
• Or is it revenue after refunds, discounts, and other deductions have been taken out?
• Second: Does the company meet the relevant eligibility requirements for the incentives?
• Furthermore: What exactly do the so-called “2%” and “4%” approval ratios correspond to—in terms of time periods, policy documents, and specific companies?

None of these can be omitted.

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5,What is truly valuable is not a “low tax rate” but getting past business operations back on track.

If the company currently has:

Long-term zero declaration

Cost-to-Invoice Shortfall

Multiple Store Mergers

Discrepancy Between Platform Transaction Volume and Reported Revenue

The customs declarant and the business entity are not the same

In such situations, it is not recommended to immediately react by:

“Hurry up and come up with a policy to lower taxes.”

It would be even better to start by doing a completeCross-Border Business Health CheckThe

Step 1: Retrieve the platform data

Compiled by:

• Orders from platforms such as Amazon and Temu
• Platform Settlement Reports
• Refund History
• Platform Fees
• Third-Party Payment Transaction History

First, let's get this straight:

How many were actually sold in the past?

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Step 2: Verify Customs Data

Continue matching:

a customs declaration form

Logistics Documents

export pattern

Overseas Warehouse Inventory

Conclusion:

Is it possible to create a closed-loop business cycle between platform sales, export data, and inventory?

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Step 3: Verify Cash Flows

Stay tuned:

Platform → Third-Party Payments → Overseas Accounts → Domestic Accounts

Keep track of every major cash flow.

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Step 4: Review the Bookkeeping Report

Finally, put:

Platform Sales + Customs Data + Cash Flow + Financial Reporting

Put them side by side for comparison.

Only then can you truly see:

Is the company really facing a high tax burden, or is there a problem with its historical accounting records?

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For cross-border sellers in Shenzhen, the priority isn’t to “hurry up and apply for tax registration,” but to first determine whether they are a good fit for it.

If a company currently finds itself in any of the following situations, it is strongly recommended that it conduct a specialized assessment as soon as possible:

① There is a severe shortage of upstream cost invoices

The actual procurement costs are very high, but there are very few compliance documents available.

② The platform's transaction volume is growing very rapidly

However, the financial accounting and reporting systems have not been updated accordingly.

③ Multi-platform, multi-store, and multi-entity operations

There is a commingling of revenue, inventory, personnel, warehouses, and funds.

④ A long history of filing zero returns

In particular, there are significant discrepancies between the platform’s transaction volume and the data reported by companies.

⑤ I have received a tax risk alert

Alternatively, the tax authorities may require companies to provide information regarding their platforms, finances, customs declarations, and other matters.

What these companies really need to do is not simply look for the “lowest tax rate,” but rather:

First, thoroughly review past transactions, revenue, costs, funds, and accounting entries, and then determine which tax collection method applies and how to make the necessary corrections.

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7,Special Note: Do not interpret “tax assessment” as a long-term tax avoidance strategy for cross-border businesses.

This point must be made clear.

Fixed-rate taxation is not a tool for businesses to evade taxes.

And certainly not:

“Since there aren’t many expense receipts, I figured I’d try to apply for a fixed-rate deduction.”

If there are obvious issues regarding the authenticity of a company’s business operations, its corporate structure, revenue data, or cash flow, no tax collection method can replace the company’s obligation to file accurate tax returns and retain relevant records.

Especially now that the tax information reporting mechanisms for cross-border platforms are constantly being improved, businesses should pay even greater attention to:

Platform data

Customs Data

Funding Data

Financial Data

The matching relationship between them.

Truly competitive cross-border companies of the future will certainly not be:

“Pay the least amount of taxes.”

Instead:

“Authentic business transactions, clear data, complete supporting documents, and a reasonable tax burden.”

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8,A Piece of Advice for Cross-Border Sellers in Shenzhen: Don’t Wait Until an Audit Comes to Start Getting Your Affairs in Order

If your business is currently experiencing:

High Volume + Low Declaration

Long-term zero declaration

There is a severe shortage of cost invoices

Confusion Among Multiple Store Entities

Discrepancies between the platform, customs, banks, and accounting data

We recommend conducting a targeted self-inspection right away.

You can follow these steps:

Platform Sales → Customs Declaration → Logistics and Inventory → Platform Collections → Bank Statements → Financial Reporting → Cost Vouchers

Check this link item by item.

The final result is a single:

"Table of Differences in Financial and Tax Risks in Cross-Border E-Commerce"

Mark each difference:

What's the difference?

Why does it happen?

Is there any proof?

Do we need to make any adjustments?

Are there any issues with past filings?

Once all these issues have been clarified, we will then make a judgment based on the company’s actual circumstances:

Audit, assessment, amended filing, accounting adjustments, or other compliance solutions.

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The essence of tax compliance is not simply to minimize the tax burden, but to ensure that a company’s tax burden aligns with the actual scale of its business operations, while remaining fully compliant with the law.

If a company does indeed have complex historical accounting records, insufficient cost documentation, and significant discrepancies between its platform data and tax filing data,The sooner you sort things out, the easier it is to find an appropriate course of action; the longer you wait until after a formal audit to address the issue, the less room you’ll have to take the initiative.

Scan the QR code to add our online customer service representativeWeChat ID: kuajinghg001, GetCustomized Cross-Border Compliance Solutions, where professional consultants will provide one-on-one analysis of your business structure to identify the compliance path that best suits your needs.

Final Note: This article discusses topics such as assessed taxation and corporate income tax incentives and is intended solely for the analysis of policy and business logic. Specific eligibility criteria, taxable income rates, tax rates, and preferential policies are subject to the enterprise’s actual circumstances, as well as the current and effective policies and assessment results issued by the competent tax authorities. It is not recommended to directly apply the information based solely on examples found online.