The State Administration of Taxation (SAT) has issued new guidance to internet platform companies ahead of the October 1 implementation of mandatory reporting of identity and income data for platform operators and workers. The authority stated that platform enterprises must not shift their own tax-related obligations onto individuals using the platform, including through indirect or disguised charges.
The clarification applies to personnel engaged in activities such as delivery, courier services, transport and domestic work, who constitute a significant portion of labor participants in the platform economy.
No Change in Tax Burden for Eligible Low-Income Workers
According to tax specialists cited by state media, individuals engaged in these forms of flexible labor will not be required to submit income reports independently if they fall within existing tax exemption or preferential categories.
To manage withholding procedures, the SAT has introduced a cumulative withholding approach for income earned through platforms. Under this method, no withholding is required for individuals whose monthly income is below RMB 6,250. Workers earning above this threshold may still apply relevant deductions during annual settlement, including those related to childcare, education, elder support, rent or mortgage payments.
VAT Exemptions Remain Applicable
The announcement reiterates that income derived from services provided through platforms is eligible for value-added tax exemptions available to small-scale taxpayers. Individuals with monthly sales below RMB 100,000 are not required to declare VAT on a per-transaction basis.
Compliance Responsibilities Assigned to Platforms
The SAT emphasized that platform enterprises are responsible for fulfilling withholding, payment and reporting obligations in accordance with current tax regulations. Companies are instructed to guide users of the platform in accessing applicable incentives without charging additional fees under the name of tax withholding or administration.
Authorities indicated that tax-related violations by platforms will be handled according to law.