The question I’ve been asked most often lately: Do Douyin shops actually have to pay taxes?

The answer is—Yes. Regardless of whether you have a business license, as long as you generate business income, you have a tax obligation.

However, behind the phrase ”you have to pay taxes,” there’s a huge difference between having a business license and not having one—so huge that one can operate normally, while the other may be classified as tax evasion.

Major Trends for 2026: Platform Data Reporting + Full Coverage of the Fourth Phase of the Golden Tax System—Douyin Shops Are No Longer in a ”Blind Spot.”

What changes will there be to the tax policy for Douyin Stores in 2026?

Many people still cling to the notion that ”it’s just a small shop—no one’s watching.” The reality is:

Simply put: The days when ”if you didn’t issue an invoice, no one would know” are coming to an end. Starting in 2026, Douyin’s platform data will be integrated with the tax system—the system will automatically cross-check how much you’ve sold, which card you’ve withdrawn funds to, and whether you’ve filed a tax return.

How big is the difference between a Douyin Store with a business license and one without?

This is the most critical issue. Even when opening a TikTok store, having a business license versus not having one results in completely different tax treatment:

The biggest difference isn't ”how much tax you pay,” but rather ”the completely different classification if you're caught.”If you have a license, it’s called ”underpayment and back payment”; if you don’t have a license, it’s called ”operating without a license + tax evasion”—the latter may result in administrative penalties or even criminal liability.

Douyin Store: Licensed vs. Unlicensed—How Much Is the Annual Tax Difference? Let’s Do the Math

Take a Douyin Store with an annual turnover of 3 million and a purchase rate of 60% (1.8 million in procurement costs) as an example:

3 Million in Revenue: Tax Burden Comparison Between Licensed and Unlicensed Businesses

Has a business license (small-scale company)

Revenue of 3 million

Less: Cost of Goods Purchased (with receipts) - 1.8 million

Less: Operating expenses—300,000

Taxable income: 900,000

Value-Added Tax (Small-Scale Business: 1%) 30,000

Corporate Income Tax (Preferential Treatment for Small and Micro Enterprises) ~75,000

Total annual tax liability for licensed businesses: ~105,000

No Business License (Classified as a Sole Proprietorship)

Revenue of 3 million

Non-deductible costs (transactions without invoices) 0

Profit of 3 million determined based on total revenue

Individual Income Tax (Business Income) ~900,000+

Late payment penalties (based on 2 years) ~ 200,000

Fines (0.5–5 times) are uncertain

Total annual tax liability and fines for operating without a license: 1.1 million+

For the same 3 million in turnover: a licensed business pays 105,000, while an unlicensed one might pay over 1.1 million. That’s a 10-fold difference.

The reason is simple: operating without a license means expenses cannot be deducted, which leads to inflated profits and taxes being paid based on those inflated figures. Add to that the fines for operating without a license, and the costs quickly spiral out of control.

How to Choose Between a Sole Proprietorship and a Corporation When Applying for a Business License for a TikTok Store?

A Sole Proprietorship: Suitable for businesses with monthly revenue under 100,000

• Registration is simple, low-cost, and easy to maintain
• Value-Added Tax: Exempt for monthly amounts under 100,000 (small-scale taxpayers)
• Individual income tax is levied on business income using a progressive tax rate ranging from 5% to 35%.
• Unlimited liability, suitable for small-scale pilot phases

B Limited Liability Company: Suitable for businesses with monthly revenue of 100,000 or more

• Limited Liability, Protection of Personal Assets
• Value-Added Tax: Small-scale taxpayers—3% (reduced to 1% in 2026)
• Corporate Income Tax: Tax breaks for small and micro enterprises with annual revenue of up to 3 million, approximately 5%
• Input tax is deductible, invoices can be issued as usual, and funds can be withdrawn via corporate accounts
• Maintenance costs are slightly higher (bookkeeping and tax filing), but the overall tax burden is typically lower.

Key criterion: If monthly revenue exceeds 100,000, we recommend registering the business directly. Don’t wait until revenue grows significantly to do so later—the costs of switching and the risks of retroactive tax audits will be much higher.

How to Get Your TikTok Store Licensed in Just 3 Steps

1 Obtain a Business License

• Bring your ID card and proof of business premises to the Market Regulation Bureau.
• Business scope includes ”online sales” or ”e-commerce”
• Certificates are issued the same day for sole proprietorships; for companies, it takes 3–5 business days.

2 Tax Registration + Bank Account Opening

• Complete tax registration within 30 days of receiving the business license.
• Open a business account (for a company) or an operator account (for a sole proprietor)
• Request an Invoice Limit (As Needed)

3 Switch Payment Platforms + Set Up Accounting

• Douyin Store Withdrawal Account Linking Now Requires a Business or Operator Account
• Start keeping monthly books and filing monthly tax returns
• The purchasing department requires an invoice to be issued to establish a chain of cost documentation.

The 3 Most Dangerous Forms of Complacency

False Assumption #1: ”The platform isn’t going to report it on its own anyway.”

Submitting platform data for 2026 is a legal requirement. As a leading platform, Douyin has already established a comprehensive data reporting system. Whether it’s how much you’ve sold or how much cash you’ve withdrawn, that data is already with the tax authorities.

Misconception No. 2: ”The fines for operating without a license aren’t that high.”

Operating without a license is punishable by confiscation of illegal gains plus a fine. When combined with back taxes, late payment penalties, and fines for tax evasion, the total amount can be several times higher than the amount that would have been owed under normal circumstances. The nature of the offenses is different, and the severity of the consequences is entirely different.

Lucky Break No. 3: ”Wait until business picks up before getting a license”

The longer you wait to register your business, the longer you’ll have been operating without a license, and the higher the amount of back taxes you’ll owe. Registering early is called “proactive compliance,” while registering only after receiving a notice is called “reactive payment”—these are two very different classifications, and the consequences are worlds apart.