China Demands Sales Data from Amazon and E-Commerce Platforms

According to a Bloomberg report on November 13, China has requested multiple cross-border e-commerce platforms to provide accurate sales data for Chinese merchants, signaling a major crackdown on tax evasion among sellers operating through online marketplaces.

Sources revealed that Amazon began sharing data in mid-October, while Alibaba’s AliExpress, Pinduoduo’s Temu, and SHEIN have also begun submitting data upon receiving official notice. Importantly, tax authorities did not accuse these platforms of any wrongdoing.

Research from Marketplace Pulse (published in September) shows that Chinese sellers account for 50.03% of Amazon’s global active merchants — meaning the new enforcement action will directly affect a significant portion of China’s cross-border sector. Some sellers have reportedly received SMS reminders from local tax authorities urging tax payment.

Under PRC tax laws, companies with annual sales exceeding RMB 5 million are required to pay VAT of up to 13%. Exemption applies only when merchants can provide customs declarations and other export documents — conditions that many online sellers cannot meet under current business models. This increases their potential tax burden substantially.

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Compliance Pressure to Transformation Opportunity

In light of this regulatory shift, cross-border sellers must fundamentally rethink their tax compliance strategy and transition from reactive to proactive planning.

1. Build a compliant offshore business structure

Many sellers currently operate cross-border sales under personal accounts or domestic company entities, creating unclear tax identities and mixing personal and business finances.A priority now is to separate personal tax identity from business asset structures.

Sellers should consider setting up an independent offshore operating entity (e.g., a Hong Kong company) to conduct cross-border sales, sign contracts, and receive foreign currency. This not only establishes compliant tax planning but also represents a key step toward internationalization and standardized operations.

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2. Expand through offshore jurisdictions

For Mainland sellers with overseas sales exposure, relying solely on domestic taxation means higher tax liabilities and complicated filing requirements. Sellers should evaluate regional tax incentives and global structuring options.

Hong Kong, for example, offers:

• A simple and transparent tax regime

• Competitive profits tax rate (8.25% for the first HKD 2 million in profits)

• A Double Taxation Avoidance Agreement with Mainland China, preventing the same income from being taxed twice

These advantages make Hong Kong a strong candidate for establishing an Asia-Pacific headquarters.

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3. Seek professional advisory support

Tax compliance is complex and highly specialized. Sellers are advised to engage tax professionals or legal consultants early. Oceanus Strategic provides integrated solutions for identity planning and business expansion, helping enterprises optimize their global setup within a compliant framework.

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Conclusion

Instead of passively responding to tax inspections, cross-border sellers should view this regulatory upgrade as a strategic opportunity to enhance corporate governance and achieve long-term sustainable growth. With forward-looking planning and professional support, businesses can secure a first-mover advantage under the new regulatory landscape.

If you are considering expanding your business into Hong Kong, feel free to contact Oceanus Strategic for professional advisory services. More insightful articles will be published soon — stay tuned.