Editor's Note: On June 20th, the "Regulations on the Reporting of Tax-Related Information by Internet Platform Enterprises" (State Decree No. 810) was officially released. [It stipulates the first centralized reporting of identity and income information of operators and practitioners within platforms from October 1st to 31st.]{.mark} This regulation will have profound impacts on internet platforms, their operators, and practitioners. Subsequently, on June 26th, the State Taxation Administration (STA) successively issued the "Announcement on Matters Concerning the Reporting of Tax-Related Information by Internet Platform Enterprises" (STA Announcement [2025] No. 15, hereinafter referred to as "Announcement 15") and the "Announcement on Various Matters Concerning Withholding Reporting and Agency Reporting for Practitioners within Platforms by Internet Platform Enterprises" (STA Announcement [2025] No. 16, hereinafter referred to as "Announcement 16"). This article will systematically analyze the impacts on platform enterprises and related practitioners based on the specific content of the aforementioned new regulations.

I. Which Entities Will Be Affected by the New Regulations?

These new regulations primarily affect the following two types of entities: internet platforms, as well as operators and practitioners.

(A) Internet Platforms

The internet platforms covered by the new regulations refer to e-commerce platform operators as defined in the "E-Commerce Law of the People's Republic of China," as well as other legal persons or unincorporated organizations that provide for-profit services such as online business premises, transaction matching, and information release for online trading activities. This includes various types of platforms that provide for-profit services for operators and practitioners within the platform to conduct online trading activities, mainly divided into the following seven categories:

1.Online commodity sales platforms;

2.Live streaming platforms;

3.Online freight transportation platforms;

4.Flexible employment platforms;

5.Platforms providing services such as education, medical care, travel, consulting, training, brokerage, design, performance, advertising, translation, agency, technical services, audiovisual information, gaming/leisure, online literature, video/image/text generation, online loans, etc.;

6.Platforms providing aggregation services for internet platforms;

7.Mini-programs, quick apps, etc., that provide for-profit services for operators and practitioners within the platform to engage in online trading activities, as well as platforms providing infrastructure services for mini-programs, quick apps, etc.

Furthermore, the new regulations also bring platform enterprises established overseas but with operating entities in China into the scope of information reporting entities. It stipulates that domestic enterprises that have legally obtained value-added telecom business operating licenses should report the tax-related information; if the operating entities established in China have not obtained value-added telecom business operating licenses, the domestic operating entities that provide services such as merchant onboarding, store operation, and marketing promotion for operators and practitioners within the overseas internet platform shall be responsible for reporting; overseas internet platform enterprises that have not established operating entities in China must appoint a domestic agent to complete the tax-related information reporting.

(B) Operators and Practitioners

Operators and practitioners refer to legal persons, unincorporated organizations, or natural persons providing for-profit services through internet platforms. Exception: For practitioners engaged in convenient labor activities such as delivery, transportation, and domestic services within internet platforms, who according to law enjoy tax benefits or are not required to pay taxes, the internet platform enterprise does not need to report their income information. Tax-related information already reported when the internet platform enterprise handles tax-related matters such as withholding declarations and agency declarations for operators and practitioners within the platform according to regulations does not need to be reported again.

II. What Tax-Related Information Will the New Regulations Cover?

The tax-related information required to be reported by platforms under the new regulations can be divided into two categories: the first is basic information about the platform itself, and the second is identity and income information of operators and practitioners within the platform.

(A) Basic Information of the Platform Enterprise

Internet platform enterprises shall, within 30 days from the effective date of the new regulations or within 30 days from commencing internet business operations, report information such as platform domain name, business type, unified social credit code(s) and name(s) of relevant operating entity(ies) to their competent tax authorities.

(B) Information on Operators and Practitioners within the Platform

1. Identity Information

Platforms need to report the identity information of all domestic operators and practitioners, regardless of whether they have obtained registration certificates, specifically including name (full name), unified social credit code (or taxpayer identification number, ID number, etc.), address, store (user) name, store (user) unique identification code, contact information, etc.

Overseas internet platform enterprises do not need to report the identity information of their overseas operators and practitioners.

Specifically, live streaming platform enterprises must also simultaneously report information on the relationship between live streamer agencies and internet anchors within the platform.

2. Income Information

Income information includes revenue obtained by operators or practitioners from sales of goods, services, and intangible assets, including total containing tax sales amount for the period (including actual subsidy amounts, commissions, service fees, etc.), refund amount occurred in the period (amounts for return and refund, refund without return, service refund), net income amount (net amount after subtracting refund amount from total income for the period), etc.; income from other online trading activities; number of transactions (orders). The point of income recognition is the day sales payments are received or the day a valid claim for sales payments is obtained.

If income contains non-monetary economic benefits (e.g., platform virtual currency), it should be converted into RMB according to the platform's conversion rules on the day it is actually received.

For situations where the quarterly cumulative net transaction amount from a single domestic buyer within the platform does not exceed 5000 RMB, overseas internet platform enterprises may temporarily not report income information related to sales of services or intangible assets by relevant overseas operators and practitioners to that buyer.

Furthermore, non-natural person operators within the platform who obtain live streaming-related income through internet platforms must, when paying live streaming-related income to internet anchors or their partners (including units, individual businesses, and natural persons), report the identity and income information of these internet anchors and partners to the competent tax authority.

III. What New Tax Compliance Requirements Do the New Regulations Pose for Platforms and Practitioners?

(A) Platforms: Should Standardize Information Storage and Verification, and Fulfill Withholding Obligations

The new regulations impose stricter formal and substantive compliance requirements on platforms. Platforms not only need to standardize the storage of tax-related information of operators and practitioners but also must be responsible for the authenticity, accuracy, and completeness of the information they report, and ensure the authenticity of transactions when handling withholding declarations and agency declarations.

1. Platforms are responsible for the authenticity, accuracy, and completeness of the information they report

Tax authorities have the right to verify the tax-related information reported by platforms. If a platform commits the following faulty acts during the information reporting process, it will bear corresponding legal liability: failure to report or provide tax-related information within the prescribed time limit; concealment, false reporting, omission of tax-related information, or information that is untrue, inaccurate, or incomplete due to the platform's reasons; refusal to report or provide tax-related information. Corresponding penalties include: ordered to make corrections within a time limit; if corrections are not made by the deadline, a fine between 20,000 RMB and 100,000 RMB; if the circumstances are serious, ordered to suspend business for rectification and fined between 100,000 RMB and 500,000 RMB, relevant circumstances will be included in tax payment credit evaluation management; if tax-related information is not reported or provided as required twice or more within one year, the tax authority may make a public announcement. If the platform has fulfilled its information verification obligations but information issues arise due to the fault of operators or practitioners, the platform can be exempted from liability.

Furthermore, when conducting tax inspections or identifying tax-related risks, tax authorities may require platforms to provide tax-related materials including contracts/orders, transaction details, fund accounts, and logistics information.

2. When platforms handle withholding declarations and agency declarations for practitioners, they can deduct labor service payments based on actual amounts for corporate income tax purposes if business authenticity is ensured

If a platform handles personal income tax withholding declarations and value-added tax (VAT) and additional fees agency declarations for practitioners, and completes the payment of corresponding taxes and fees, it can use the following materials as proof for corporate income tax pre-tax deduction, allowing deduction of labor service payments made to practitioners based on the actual amount: Personal Income Tax Withholding Declaration Form; Personal Income Tax Payment Certificate; Internet Platform Enterprise Agency Declaration Form; VAT and Additional Fees Payment Certificate.

Platform enterprises should, in accordance with relevant tax laws and regulations, properly retain relevant materials and documents that can prove the authenticity of the business, including but not limited to real-name verification records, business transaction details, settlement and payment records, etc., for tax authority inspection. According to relevant interpretations of Announcement 16, platforms need to regularly verify the identity authenticity of practitioners and retain the verification time and results to ensure practitioner information is true and valid. If the platform enterprise fails to retain the aforementioned materials proving business authenticity as required, the relevant certificates obtained through handling withholding declarations and agency declarations cannot be used as the basis for corporate income tax pre-tax deductions.

(B) Operators and Practitioners: Accurately Determine the Nature of Income and Declare Taxes

Relevant interpretations of Announcement 16 clearly distinguish for the first time the criteria for identifying income from labor services versus business income:

Income from Labor Services: Refers to income obtained by providing for-profit services such as live streaming, education, medical care, delivery, domestic services, tutoring, travel, consulting, training, brokerage, design, performance, advertising, translation, agency, promotion, technical services, etc., through internet platforms.

Business Income: Refers to income obtained from selling goods or providing transportation services through internet platforms.

If the income obtained by practitioners is classified as **income from labor services**, especially for internet anchors and similar roles, the **platform must correctly withhold and remit personal income tax** for these practitioners according to the nature of this income. If the income obtained by practitioners is **business income**, they should **declare and pay taxes independently according to law**, and must not harbor any luck-based psychology to evade tax obligations.

**IV. With the First Reporting Imminent, Platforms, Practitioners, Buyers, and Partners Should Pay Attention to the Impacts of the New Regulations**

**(A) Platforms: Returning to the Essence of Information Services, Traditional Profit Models Based on Invoicing Become Unsustainable**

The new regulations not only use platforms to handle withholding declarations on behalf of practitioners to improve tax compliance and collection efficiency but also substantially endow platforms with the obligation to review the **authenticity of business transactions**. Platforms are required not only to conduct formal reviews but also to ensure that the **substantive business activity has genuinely occurred**.

This requirement is based on two practical issues: Firstly, in past practices, some platforms, in the absence of real business, engaged in activities like invoicing and fund flows through document packaging, and exploited local government subsidies to seek illegal income, severely disrupting market order. According to officials from relevant departments of the State Taxation Administration, since the new regulations were opened for public comment late last year, the number of such "shell platforms" has decreased by over 100. Secondly, platforms typically only provide technical support without deep involvement in actual business operations, creating opportunities for practitioners and partners to collude in fabricating transactions, potentially exposing platforms to significant tax risks like issuing false invoices without their knowledge. The implementation of the new regulations will help platforms prevent such risks, while also placing higher demands on their information processing capabilities and tax compliance management systems.

**(B) Operators and Practitioners: Converting Income Nature, Using Assessed Collection to Split Income, and Similar Practices Are No Longer Feasible**

For operators and practitioners under the new regulations: On one hand, as mentioned above, although the platform is responsible for the authenticity, accuracy, and completeness of the information it reports, it is not liable for errors caused by the operators and practitioners themselves. Therefore, operators and practitioners must first ensure that their identity information, income information, and other tax-related information are true, accurate, and complete. On the other hand, the new regulations make income information received by operators and practitioners from platforms fully transparent, making previously common tax evasion methods difficult to continue.

In the past, because business income could be subject to assessed collection in some regions, resulting in lower effective tax burdens, some practitioners illegally reclassified income such as labor service as business income for declaration—a typical tax evasion violation. With the new regulations, tax and relevant authorities can legally obtain the tax-related information of operators and practitioners within platforms, significantly enhancing their ability to identify and supervise non-compliant behaviors like illegal income conversion. Simultaneously, the new regulations clarify the distinction between income from labor services and business income. Under this measure, tax avoidance through illegal conversion of income nature may no longer be feasible.

Furthermore, splitting income—dispersing income that should be recognized by a single taxpayer across multiple entities to fraudulently claim VAT benefits for small-scale taxpayers or avoid general taxpayer registration—is another common tactic used by some operators to evade taxes. The new regulations comprehensively strengthen platform tax information reporting requirements, making such income-splitting practices difficult to conceal and further reducing the space for non-compliant operations.

(C) Buyers or Partners: Should Promptly Adjust Business Models to Guard Against Risks of False Invoicing and Tax Evasion

Besides directly affecting platforms, operators, and practitioners, the new regulations will also have certain indirect impacts on buyers and partners who purchase services or conduct cooperation through platforms.

Firstly, models that previously relied on practices like platforms making up for missing invoices are more likely to attract the attention of tax authorities under the new regulations. With the comprehensive transparency of income information within platforms, combined with big data supervision means, tax authorities can more easily obtain information corresponding to the service related to the buyer or partner, thereby enhancing their ability to identify false invoicing and tax evasion. This means the tax risks associated with such practices have increased significantly.

On the other hand, the new regulations also provide more convenience for tax authorities to investigate tax-related risks. For example, tax authorities can retrieve platform data (e.g., transportation routes from freight platforms) to verify the authenticity of business transactions and determine whether goods transportation actually occurred. This "substance over form" supervision approach reminds buyers and partners that they should not only focus on the consistency of contract, capital, invoice, and logistics but also ensure the business itself is genuine and reliable to avoid the risks of false invoicing and tax evasion.

V. Summary

The introduction of the new regulations marks a critical step forward in the tax supervision of the platform economy, with widespread and profound impacts. For platform enterprises, compliance responsibilities have increased significantly. They must not only report tax-related information comprehensively and accurately but also substantively review business authenticity and fulfill withholding obligations according to law, otherwise facing severe penalties. For the vast number of operators and practitioners, income information is becoming transparent, traditional tax avoidance methods are failing, and the clarification of income nature provides clear guidance for lawful tax payment. Buyers and partners are also indirectly affected. The authenticity of business becomes a core requirement; beyond the "four flows consistency," emphasis on substantive transactions is essential to prevent risks of false invoicing and tax evasion.