Amazon’s New Tax Rule Hits Offshore Chinese Sellers

Amazon has recently mandated that foreign entities, including those from Hong Kong and the United States, must report their tax data to Chinese tax authorities. This requirement applies even if the legal entity is a U.S. company owned by a Chinese citizen. The regulation uses the nationality of the actual controlling person as the basis for determination, rendering traditional offshore structures ineffective.

Compliance and Reporting

Industry experts advise cross-border sellers to abandon strategies aimed at tax avoidance and instead focus on compliant tax reporting and proper bookkeeping. Sellers have shared emails indicating that stores registered under Hong Kong companies received notifications similar to those for domestic entities, emphasizing the need for quarterly tax data submission to Chinese authorities.

As tax compliance becomes more stringent, it is crucial for all cross-border e-commerce practitioners to ensure full tax payment, actively communicate with tax departments, and collaboratively promote industry-specific compliance solutions to achieve long-term profitability in the cross-border market.

Amazon's New KYC Requirements

Additionally, Amazon has introduced a new regulation requiring domestic cross-border sellers to upload the legal representative's household registration page. Failure to complete this verification within 60 days will result in the suspension of the store and freezing of funds. This measure primarily targets nominal legal representatives.

• 41% of recent European site audits were rejected due to missing household registration materials.
• Over 90% of these rejections involved nominal legal representatives.
• Individuals who previously served as nominal representatives for a fee now face significant tax liabilities and potential legal risks.

The industry suggests promptly changing the legal representative, retaining relevant evidence, and clearly delineating operational responsibilities to mitigate risks.

Emerging Market Trends

Recent reports indicate that Brazil's e-commerce spending is projected to grow by 104% by 2036, significantly outpacing the overall consumption growth of 66%. Currently, Brazilian consumers allocate 11.5% of their spending to e-commerce, surpassing several developed countries.

Similar trends are observed in emerging markets like India, Indonesia, and Nigeria, where e-commerce growth rates exceed those of developed markets. In South Korea, online shopping reached a record $188 billion in 2025, driven by mobile shopping, which accounted for 77.4% of December's online transactions.

Strategic Insights for Sellers

In today's global trade landscape, Chinese brands venturing abroad must focus on refined operations, brand building, local market penetration, and ecosystem collaboration. The era of solitary expansion is over; partnering with professional ecosystem players is essential for efficient problem-solving, risk reduction, and sustainable growth.

For example, the 2026 Brand Overseas Action Guide emphasizes the importance of value integration with ecosystem leaders like WotoHub, YinoLink, Shoplazza, and others.

Logistics and Market Developments

Lazada's recent Ramadan promotions in Indonesia resulted in a 3.5-fold increase in sales, driven by both order volume and order value. The peak shopping period coincided with the distribution of Eid bonuses, enhancing consumer spending power.

Key product categories saw significant growth, with fashion sales increasing fivefold and home living products growing by 4.5 times. Electronics also performed well, with a fourfold increase in sales.

Enhancements in Seller Tools

Etsy has updated its seller tools to improve data analysis and operational efficiency. These updates include optimized product listing pages, automatic content filling based on past seller information, and fixed product links for better search engine recognition.

• Clearer layout for product listing pages.
• Automatic filling of logistics and return policies.
• Removal of “material tags,” with information now included in attribute fields.

These changes aim to help sellers make more informed business decisions and enhance their operational efficiency.

Global Trade and Policy Updates

Iran is considering implementing a fee system for ships passing through the Strait of Hormuz, similar to the Suez Canal. This development, coupled with regional tensions, has attracted significant attention from the shipping, energy, and financial markets.

In response, U.S. President Trump has stated that if an agreement is not reached soon, the U.S. may target key Iranian infrastructure, including power plants and oil wells.

EU's New E-commerce Regulations

The European Union is set to introduce a new handling fee for cross-border e-commerce parcels, aimed at covering the additional customs processing costs associated with small parcels. This fee will be implemented by November 2026 at the latest.

The fee will be borne by the entity responsible for paying customs duties, preventing cost transfer to consumers. The EU Commission will determine the specific fee standards, which will be reviewed biennially.

Final Thoughts

The evolving landscape of cross-border e-commerce presents both challenges and opportunities. As regulatory requirements tighten, compliance becomes a critical factor for sustainable growth. Sellers must adapt to these changes by embracing compliant practices and leveraging strategic partnerships.

By staying informed and proactive, cross-border e-commerce practitioners can navigate these complexities and continue to thrive in the global market.