The State Council of China adopted a “Regulation on Tax-Related Information Reporting by Digital Platform Enterprises” on June 20, 2025. The published regulation demonstrates a clear commitment by the respective Chinese authorities and experts in the digital economy to modernize further and regulate the tax framework of the digital economy.
The adopted Regulation is primarily shaped in alignment with the OECD’s framework, from the perspective of the initial governing rules governing the reporting requirements. Considering the domestic legislative framework, the Regulation is formulated in accordance with the Tax Collection and Management Law and the E-Commerce Law.
Mandate of the New Requirements
The Regulation was adopted on June 20, 2025. However, the date from which the regulations will be applicable is still missing. This is a logical flow of events when considering the magnitude of this change to the tax responsibilities of the persons in scope.
Impact of the new Regulation
Following the first version of the Regulation, it can be concluded that both domestic and overseas digital platform operators will be in scope. The taxable persons that are within the scope of the new regulations are very extensive. At the moment, the reporting requirements will mainly cover the following internet platform operators:
- Digital platforms that facilitate the supply of intangible services and goods
- E-commerce platforms that enable the supply of physical products
- Subscription-based platforms that facilitate live streaming services
Reporting Requirements
The domestic or foreign platform operators that are within the scope of the new Regulations should provide a monthly reporting declaration, which will include at least the following information:
- Platform domain name and business type
- Validated business and/or personal information of the respective underlying suppliers(natural persons and/or legal persons)
- Income information related to sales facilitated by the platform
Penalties
Digital platform operators within the scope of the new Regulation should also become familiar with the types of non-compliant behavior that will result in fines and penalties.
If the responsible platform operator infringes the tax framework through any of the behaviors mentioned below, it will likely trigger a fine and/or penalty. To remedy this situation, the revenue authority will, as a first step, issue a tax notice regarding non-compliance. If the respective enterprise fails to comply with the guidelines within the predefined timeframe, it will be obliged to pay the fine at a later stage.
- For “minor”non-compliance, the range of penalties is between EUR 2500 and 12,000; and
- For “more” serious infractions, the range of penalties is between EUR 12,000 and 60,000.
Starting from January 1, 2026, the modern VAT regime will come into effect in China. The adoption of many internationally accepted VAT principles unequivocally shows the approach of the Chinese government. The adoption of the latest Regulation concerning the reporting requirements of digital platform operators also indicates that China is highly determined to enhance the tax framework of the digital economy.
Aleksandar Delic
Indirect Tax Manager – E-Commerce