China Releases Draft Tax Law Revision, Proposes Greater Reporting Responsibilities for Online Platforms
The draft revision would update a 1992 law, cap some late-payment surcharges and introduce more differentiated penalties for tax violations.
China has released a draft revision of its Tax Collection and Administration Law for public consultation, proposing updated rules for the digital economy, stronger standards for tax enforcement and additional protections for taxpayers.
The draft was reviewed for the first time by the Standing Committee of the 14th National People's Congress on Nov. 6 and subsequently published for public comment, according to Xinhua, in a report carried by China's State Taxation Administration.
The proposed revision contains six chapters and 100 articles. Compared with the existing law, it adds 13 articles, removes seven and revises 75. The current law was introduced in 1992 and underwent a comprehensive revision in 2001, making the latest proposal a significant update to a legal framework that has been in place for more than two decades.
One of the most important areas addressed by the draft is the growing role of internet platforms in China's economy. The proposal clarifies that platform companies would be required, in accordance with relevant rules, to handle tax declaration matters concerning businesses and workers operating through their platforms.
The provision reflects the expansion of online commerce, gig work and other forms of digital business. E-commerce marketplaces, delivery services, ride-hailing companies and other platform operators can connect large numbers of sellers and service providers with consumers. The authorities have increasingly sought to improve the transparency of income generated through these activities and ensure that tax obligations are properly fulfilled.
For businesses, the proposed provisions could mean closer coordination between platforms and tax authorities. Companies may need to review how they collect, verify, retain and submit tax-related information, while ensuring that their procedures comply with data-protection and other applicable legal requirements.
The draft also includes measures intended to protect taxpayer rights. According to the Xinhua report, the proposal would introduce a ceiling on late-payment surcharges at twice the amount of the overdue tax and add circumstances in which such charges could be waived.
Another proposed change concerns administrative reconsideration. The draft would remove the requirement for taxpayers to pay the disputed tax or provide a guarantee before applying for administrative reconsideration. The change is intended to make it easier for taxpayers to challenge administrative decisions and seek legal remedies.
The proposal also seeks to distinguish between different types of tax violations. It would establish separate penalty ranges for tax evasion, cases in which tax has been underpaid without constituting evasion, and situations involving evasion-related conduct that does not result in an actual loss of tax revenue.
Such distinctions are intended to make enforcement more proportionate and clarify the legal consequences of different actions. The draft also seeks to align tax administration rules with other legislation, including the Civil Code and amendments to the Criminal Law.
The revision comes as China continues to adapt its tax system to changes in the economy. Digital platforms have created new ways for individuals and small businesses to earn income, while cross-border e-commerce and online services have made tax administration increasingly complex.
The government has said the revision aims to protect national tax revenue while creating a fairer and more predictable environment for businesses and taxpayers. It also seeks to improve the consistency of tax enforcement and reduce disputes over how rules are applied.
However, the proposal has not yet become law. The draft is open for public consultation, and its provisions may be revised before further legislative consideration. Businesses and platform operators will therefore need to monitor the consultation process rather than treat the proposed rules as final requirements.
If adopted, the revised law could become an important part of China's effort to modernize tax administration, improve transparency in the platform economy and strengthen legal protections for taxpayers.