China has introduced the “Regulations on the Submission of Tax-Related Information by Internet Platform Enterprises”, accompanied by a detailed implementation Announcement. Together, these measures mark a significant step toward strengthening oversight of the platform economy, curbing disorderly competition, and safeguarding taxpayer rights.
Addressing Disorderly Competition
The platform economy has expanded rapidly in recent years, but its highly virtual and cross-regional nature has left gaps in supervision. Practices such as fake transactions, order brushing, and inflated sales have distorted market signals and undermined fair competition.
The new Regulations require platform enterprises and related intermediaries, including MCNs, to submit detailed tax-related information on operators, online anchors, and business partners. This reporting obligation enhances transparency and traceability of transactions, making it more difficult for operators to exploit regulatory blind spots.
By enabling tax and market regulators to share and analyze transaction-level data, authorities can better detect irregularities such as false marketing, malicious discounting, and fraudulent invoicing. In turn, this helps protect compliant businesses from being crowded out by unfair practices.
Breaking Down Local Barriers
Platform enterprises often operate across multiple regions, where local governments may offer excessive incentives to attract investment. Such practices can distort the allocation of resources and weaken efforts to build a unified national market.
The Regulations standardize reporting obligations nationwide. Enterprises must submit identity, income, and operating location data to tax authorities under a uniform framework. This removes opportunities for regional discrepancies and reduces the scope for enterprises to exploit “registration-operation separation” loopholes.
By aligning data standards and strengthening cross-regional coordination, the policy addresses the tension between local supervision and the national scale of platform operations. It reinforces the principle of fair, consistent enforcement across all provinces.
Protecting Law-Abiding Businesses
A key concern is whether stricter reporting requirements will raise compliance costs for small enterprises and individuals operating on platforms. Current tax thresholds mean that most micro and small businesses—those with monthly sales under RMB 100,000—and individuals with modest annual incomes remain unaffected.
Instead, the focus is on high-income operators who underreport earnings or engage in sophisticated tax evasion schemes. Through data comparisons and risk analysis, tax authorities can now more effectively identify hidden income, false declarations, and related-party profit transfers.
In practice, the policy protects the vast majority of small and medium operators while ensuring that those who benefit most from the platform economy contribute fairly.
Building a Unified and Fair Market
The Regulations underscore China’s broader effort to standardize governance of the digital economy. By integrating tax-related data into a national regulatory framework, they promote:
- Greater transparency and fairness in competition;
- Consistent law enforcement across regions; and
- A stronger environment for compliant businesses to grow.
As the State Administration of Taxation emphasizes, cracking down on tax evasion and unfair practices is not a burden on legitimate operators but a protection. Creating a level playing field enhances confidence in the platform economy and supports long-term innovation.
Conclusion
China’s new rules on tax-related information reporting are more than a technical compliance requirement—they represent a structural reform of how the platform economy is regulated. By closing loopholes, harmonizing standards, and ensuring fairness, the Regulations aim to protect law-abiding businesses, strengthen market order, and advance the construction of a unified national market.