China’s tax landscape is entering a new era of full-spectrum data oversight, with implications for international businesses and cross-border e-commerce operators. In October 2025, the State Taxation Administration and National Bureau of Statistics formalized a memorandum for real-time information exchange, completing the integration of tax, corporate registration, social security, and property data. This interconnected system effectively ends the “two sets of books” era: discrepancies between declared revenue and operational data are now automatically flagged, exposing potential compliance violations that can affect audits, fines, credit ratings, and access to loans or tenders.

Cross-department coordination has tightened further. Tax authorities now share data with 24 government departments—including customs, banking, public security, and market regulators. For example, customs monitor export volumes and values to prevent false claims for tax refunds; banks report account movements to identify potential tax evasion; and market regulators track company registration changes, closing loopholes for shell companies. Multi-agency cooperation ensures rapid intervention: suspected invoice fraud triggers coordinated checks by tax authorities and public security, with judicial follow-up as needed.

For international e-commerce platforms, compliance is no longer optional. US-based Amazon, for instance, now reports all China-based sellers’ identity, transaction, and revenue data to Chinese tax authorities, covering both domestic and cross-border sales. AliExpress, Shein, Tmall, Taobao, and JD have implemented similar quarterly reporting requirements, reinforcing the need for sellers to verify data and align internal records with tax filings.

Experts note that tax transparency will reshape business operations rather than increase burdens. Hong Yong from the Chinese Academy of International Trade and Economic Cooperation observed that previous information asymmetries enabled tax evasion, creating distortions and undercutting competition. Zhu Keli, founding director of the China Institute of New Economy, added that compliance capabilities are emerging as a core competitive advantage, supporting traceable orders, payments, logistics, and future fundraising or IPO readiness.

Practical Takeaways for Foreign Businesses:

• Verify Data Accuracy: Align internal accounting, payroll, and transaction records with public data to prevent automatic mismatches.

• Integrate Compliance in Business Processes: Embed tax rules into contracts, invoicing, and cash flow management to minimize operational risks.

• Leverage Technology Tools: AI-driven compliance platforms can automate monitoring and reporting, reducing human error and streamlining audits.

• Plan for Strategic Advantage: Firms with robust tax governance and transparent financial systems are better positioned to win tenders, access financing, and compete in China’s increasingly regulated market.

China’s shift to “data-driven tax governance” signals that compliance is no longer optional—it is a survival strategy. Foreign enterprises and platform operators must adapt quickly, using transparency as both a risk management tool and a source of competitive advantage.