How China's 2025 New Tax Regulation Will Affect Ecommerce Platforms and Dropshipping

On June 26, 2025, the State Taxation Administration of the People’s Republic of China officially released the Regulations on Tax-Related Information Reporting by Internet Platform Enterprises (Hereinafter referred to as the Regulation). Starting from October 1, 2025, all internet platform enterprises operating within China will be required to report tax-related information to the Chinese tax authorities in compliance with the new regulation.

The purpose of this New Regulation is to establish a standardized tax information reporting system and ensure a fair and transparent tax environment.

But what does this mean for dropshippers? In this article, we will break down the key points of the regulation, explore its potential impacts on the cross-border e-commerce industry, and provide guidance on how international sellers like you can adapt to these changes.

Key Points of the New Regulation

Which Internet platforms are covered under the New Regulation? Does it include dropshipping website builder platforms, such as Shopify, and what information needs to be reported?

As a cross-border independent website seller, you should be aware of who reports, what is reported, and the penalties for non-compliance.

Here, we’ve summarized the key points to help you quickly understand the core content of the New Regulation.

Who Needs to Report Information

In fact, it’s easy to understand. Internet platform enterprises fall into the following categories:

1. Internet platform enterprises operating within China, including Temu, SHEIN, TikTok Shop, CJdropshipping, AliExpress, and other similar platforms.
2. Internet platform enterprises operating outside China, including Amazon, eBay, Etsy, Wish, Rakuten, OTTO, Ozon, Shopify, and other similar platforms.

How to determine whether an Internet platform enterprise needs to report tax-related information to the Chinese Tax Authorities? There are two main criteria:

1. Residence Principle. As long as Chinese sellers conduct business in China on internet platforms, whether the platforms are located inside or outside China, the platforms are required to report information about these Chinese sellers.
2. Territorial Principle. Foreign sellers conduct business in China through internet platforms, whether the platforms are located inside or outside China, the platforms are required to submit information about these sellers.

In other words, if you are conducting online business activities within China, whether through domestic or international e-commerce platforms, the platform is required to report your tax-related information to the Chinese tax authorities in compliance with the New Regulation.

For instance, if a seller based in China creates a store and operates through platforms such as Shopify, Amazon, or Temu, the local operating entity of these platforms in China is required to report the seller’s tax-related information to the Chinese tax authorities.

Similarly, even if you are not a Chinese national, as long as you operate an online store within China through platforms like Shopify, Amazon, or Temu, the Chinese operating entity of these platforms should also report your tax-related information to the tax authorities.

What  Information Needs to be Submitted?

One of the top concerns is: what does “tax-related information” actually mean?

According to the definition of the New Regulation, tax-related information refers to the data obtained by internet platform enterprises during the course of providing services, which is directly related to the tax obligations of the operators on the platform. This includes:

• Transaction Data: order amounts, turnover, product category, etc.
• Payment Information: payment accounts, amounts received, withdrawal records, etc.
• Identity Details: registration information, identity card (or passport), contact information, etc.

It is important to emphasize that the reporting of this information is intended to help the Chinese tax authorities gain a more comprehensive and accurate understanding of the taxpayer’s situation, which facilitates future tax administration and risk management.

For SourcinBox users, there’s no need to worry. The tax-related information mentioned above only applies to sellers operating online shops within China. It does not affect your regular use of SourcinBox or your dropshipping business.

Penalties for Non-Compliance

Internet platforms that fail to report tax-related information in accordance with the New Regulation may face the following penalties:

• Minor violations: a penalty ranging from CNY 20,000 to 100,000 (approximately USD 2,810 to 14,045).
• Serious violations: an order to suspend operations for rectification, along with a penalty ranging from CNY 100,000 to 500,000 (approximately USD 14,045 to 70,225).

Past Information Is Not Required

According to the New Regulation, internet platforms are not required to report any tax-related information from before the regulation took effect.

In other words, platforms are not required to report sellers’ tax-related information that occurred before the regulation came into effect on June 23.

Potential Impacts on Cross-Border E-Commerce

With the implementation of the New Regulation, cross-border e-commerce platforms will bear greater responsibilities regarding compliance and tax reporting. These platforms will need to allocate more resources to meet regulatory requirements, which may lead to changes in pricing, order processing, and overall industry development. 

Operational Adjustments

With the New Regulation taking effect in October 2025, cross-border e-commerce platforms will operate under a more unified and transparent tax framework, inevitably leading to changes in overall operational costs.

Therefore, starting from the fourth quarter of 2025, you may notice that some product prices across the cross-border e-commerce industry—like Temu, SHEIN, TikTokshop, CJdropshipping, AliExpress, and Amazon—are subject to certain adjustments.

This is not the action of a single platform, but a widespread adjustment across the entire industry to comply with the New Regulation.

Supply Chain Efficiency

To cope with the compliance costs brought by the New Regulation, cross-border e-commerce platforms may further optimize their supply chains, reduce unnecessary intermediaries, and improve overall efficiency.

Additionally, due to recent instances of export companies in China using improper methods to evade taxes, the Chinese tax authorities have strengthened their oversight, which may also contribute to price increases across the entire supply chain.

However, platforms may focus more on higher-competitiveness products, which means sellers can access higher-quality products with a more reliable supply.

Global Compliance Alignment

The New Regulation issued by China is not an isolated measure. It forms part of the OECD’s BEPS 2.0 framework and is closely aligned with its guiding principles, fully reflecting the global trend of digital economy tax regulation.

For example, the EU officially implemented the DAC7 in 2023, and countries such as the United States, Australia, Canada, Japan, and Brazil have introduced similar tax-related information reporting regulations. 

The common goal of these policies is to prevent tax evasion, strengthen tax supervision of cross-border e-commerce and the digital economy, and improve tax compliance and regulatory efficiency through measures such as reporting of tax-related information, platform withholding and payment, and transparent declaration.

As international tax rules become more harmonized, other countries and regions may gradually introduce similar regulations requiring local e-commerce platforms to report tax-related information. This indicates that the cross-border e-commerce industry is moving toward a more transparent, compliant, and sustainable development.

For sellers who have consistently operated in full compliance with the law, this regulation poses no adverse effects and can even foster a fairer and more competitive marketplace.

In summary, while this New Regulation may lead cross-border e-commerce platforms in China to adjust prices, operations, and supply chains, the ultimate goal is to increase transparency, ensure a stable supply, and offer international buyers a more reliable and sustainable shopping experience.

Implications for International Sellers

As a cross-border seller, you may be wondering whether this New Regulation will affect your orders and supply. Rest assured, we’ve outlined the potential impacts for you so you can plan your purchases more effectively.

Possible Price Adjustments

To comply with new compliance requirements, platforms may make minor price adjustments for some products. Starting in October, purchase prices you see on various platforms may be slightly higher than before.

Please be assured that these changes are primarily intended to ensure transaction stability and supply chain reliability, ensuring that the platforms provide you with quality service.

Plan Purchase Ahead

To prepare for potential price and supply chain fluctuations, we recommend planning your purchases. You can prioritize your best-selling, most profitable, and largest-volume products—those most likely to be affected by price adjustments—to help minimize additional costs.

Maintain close communication with your suppliers, place orders in advance, or adjust your purchasing plans to ensure the timely delivery of your desired products and achieve more stable pricing and supply. Rest assured, SourcinBox will always be your most reliable partner on the road to dropshipping success.

Focus on Value

Looking ahead, when facing potential price fluctuations, it’s crucial to focus on the overall value of your products. A combination of high-quality products, a stable and sustainable supply chain, and efficient, reliable services forms the backbone of a successful dropshipping business, delivering more predictable long-term returns.

It is recommended that you focus more on product quality, supply reliability, platform services, and delivery time when purchasing, rather than just focusing on the superficial price figures.

Embrace Industry Maturity

The cross-border e-commerce industry is gradually maturing. As platforms improve compliance, streamline operations, and enhance supply chain stability, sellers will benefit from a more reliable and efficient purchasing experience.

We encourage you to embrace this trend by focusing on long-term value and consistent supply, ensuring that your purchasing not only meets immediate needs but also aligns with sustainable, long-term growth.

SourcinBox’s Commitment and Actions

Regardless of how the industry evolves or how the regulatory environment changes, SourcinBox remains committed to:

Optimize Supply Chain

SourcinBox will continue to optimize its supply chain processes, including procurement workflows, inventory monitoring, logistics coordination, and supplier management, to adapt to regulatory changes and market fluctuations. SourcinBox provides you with more reliable product supply and a more consistent delivery experience, making your dropshipping business smoother and more sustainable.

Provide Stable Service 

SourcinBox will continue to provide 1-on-1 customer support. Whether it’s order processing, logistics inquiries, after-sales issues, product recommendations, or purchasing advice, our customer managers are always ready to offer professional and reliable assistance.

SourcinBox is committed to giving our customers true confidence and trust, allowing you to order and manage your purchases worry-free, regardless of industry changes or new policy requirements.

Maintain Open Communication

SourcinBox will always maintain open and transparent communication with you. It is precisely because we value our customers’ right to know that we’ve prepared this article to explain China’s New Regulation and its potential impacts, helping you plan your purchases. We firmly believe that giving our customers timely and clear information is essential for making every purchase with confidence and control.

Although the New Regulation may lead to some minor adjustments, the key point is that the industry is evolving toward greater standardization and reliability. By planning your purchases and prioritizing product quality and supply stability, you can keep your dropshipping business running smoothly and efficiently.

The tax-related information reporting regulation is nothing to worry about. It reflects the industry’s shift toward greater transparency and standardization. SourcinBox will always be your best partner, providing the support you need to keep every step of your dropshipping journey easier and hassle-free.