You may think you've thought everything through, but the tax authorities may understand your business model even better than you do.

Over the past few months, the most common question we’ve received through our support channel has been: ”Is Savi 1.0 still usable? Should I upgrade to 2.0?”

In recent months, one of the most common questions we’ve received through our support system has been: Can we still use Saiwei 1.0? Now that the platform has started reporting store revenue, how should store companies file their reports? What issues does Saiwei 2.0 actually address? We have quite a few stores—is it still too late to make the necessary adjustments?

Recently, we have been receiving a steady stream of inquiries from individual C-store sellers on Taobao.

Some people have received calls from the tax authorities asking them to verify their platform’s business data; others have received text messages or written notices requiring them to file amended returns and pay back taxes within a specified timeframe. Industry chat groups and private messages are filled with anxious voices.

“I don’t have a business license—do I still have to pay taxes?”

“There’s such a big difference between the platform’s transaction volume and what I actually receive—which figure should I use?”

“Will they bring up past issues? Will I be able to keep the store open after making the payments?”

Everyone wants to know the answers to these questions. But many sellers don’t even know who to ask or where to start.

”The store is operating normally, and the money is coming in as usual—what could possibly be wrong?"

This is what many Pinduoduo sellers are really thinking.

This is especially true for sellers of daily necessities and small goods—their gross profit margins are already slim, and they rely on high volume. They make just a few mao or a few yuan per item, face high return rates, and are subject to various platform fees. With profits already so low, who has time to worry about invoices and taxes?

It wasn’t until they received the tax risk alert that many people realized: With such high transaction volumes on the platform but such low reported income, how on earth could they explain this discrepancy to the tax authorities?