In November 2025, tax authorities exposed a tax evasion case involving online host Guo Xinxin. During the investigation, Guo attempted to evade tax obligations by claiming the platform had already withheld and remitted taxes on her behalf. However, the platform had only fulfilled withholding obligations for RMB 760,000 of her labor remuneration income, while the vast majority of her sales income and commissions had no taxes withheld or remitted. Ultimately, tax authorities ordered her to pay back taxes, late fees, and fines in accordance with the law.

This case highlights a common issue in the platform economy: who exactly bears tax-related obligations? In practice, both platforms and practitioners may hold misconceptions. Some platforms insert "taxes are the responsibility of the individual" clauses into agreements, attempting to dodge statutory duties such as information reporting and withholding, pushing all tax-related responsibilities onto merchants and practitioners. Meanwhile, some practitioners treat "the platform already withheld taxes" as a shield against their own tax obligations, failing to declare income that was not withheld or was under-withheld.

"These misconceptions and practices not only undermine national tax security but also plant seeds of compliance risk," said Duan Pingfang, Director of the Department of International Economics and Trade and doctoral supervisor at the Business School of Zhengzhou University. He emphasized that a bottom line must be clarified for all types of platform economy entities: statutory tax obligations cannot be arbitrarily transferred or shifted through agreements.

Different legal status means different tax obligations

The platform economy involves platform enterprises, within-platform operators, and within-platform practitioners, all with different legal statuses and different tax obligations.

In 2025, the State Council issued the Regulations on Tax-Related Information Reporting by Internet Platform Enterprises. The State Taxation Administration subsequently released a series of supporting documents, including the Announcement on Matters Concerning Tax-Related Information Reporting by Internet Platform Enterprises and the Announcement on Matters Concerning Platform Enterprises Handling Withholding Declarations and Agency Declarations for Within-Platform Practitioners. These documents clarified platform enterprises' information reporting and withholding obligations and provided for agency declaration services.

Duan pointed out that the core logic of the Regulations and the supporting documents is to make platforms that hold transaction data bear tax assistance responsibilities commensurate with their information advantages, solving from the source the problem in the platform economy where "data is on the platform, tax sources are on the platform, but responsibility falls through."

Under the Regulations and supporting documents, platform enterprises must report identity and income information of within-platform operators and practitioners as required. For practitioners engaged in convenient labor activities such as delivery, transportation, and domestic services, whose income information qualifies for tax preferences or is exempt from taxation, reporting may be waived. For labor remuneration income obtained by practitioners from platform enterprises, the platform must calculate and withhold taxes using the cumulative withholding method. When practitioners receive service income from the platform, the platform may handle VAT and surtax declaration on their behalf after obtaining written consent and keeping it on file.

However, the assistance obligations undertaken by platforms do not equal "doing everything." "Platform enterprises fulfilling information reporting, withholding, and agency declaration services cannot replace the tax obligations of other entities within the platform. The two must not be conflated," Duan stressed.

Specifically, within-platform operators, as independent business entities, should register their business entities, confirm tax information, truthfully declare sales income obtained through the platform, pay relevant taxes and fees in accordance with the law, and issue, obtain, and retain invoices as required. Within-platform practitioners should truthfully provide personal identity and income information and declare taxes according to the nature of their income. Income from profit-making services such as live streaming, education, consulting, and design provided through platforms constitutes labor remuneration income; after platform withholding, practitioners must still handle annual comprehensive income reconciliation if they need to pay additional taxes or claim refunds. Income from selling goods or providing transportation services through platforms constitutes business income and requires self-declaration and payment of relevant taxes.

Platforms shirking responsibility and practitioners shifting blame are both misconceptions

In practice, parties in the platform economy mainly hold three typical misconceptions.

First, using "taxes are the individual's responsibility" clauses to try to exempt platform enterprises from their own withholding obligations. Some platform enterprises stipulate in onboarding agreements that "all taxes shall be borne by the practitioner," and on this basis fail to fulfill withholding obligations. Duan believes that while tax administration laws and regulations do not prohibit parties from agreeing on who economically bears the tax burden, the withholding obligation is a statutory duty directly prescribed by tax law and is not determined by the will of contract parties. "If a platform enterprise fails to fulfill its withholding obligation and the operators or practitioners who signed the onboarding agreement also fail to declare and pay taxes, tax authorities will pursue the taxpayer's liability while also pursuing the platform's liability for failing to fulfill its withholding obligation," Duan said.

Second, packaging substantive labor relationships through "individual business registration." Some platform enterprises attempt to register within-platform practitioners uniformly as individual businesses, converting labor remuneration income that would otherwise be subject to progressive rates of 3% to 45% into "business income" subject to rates of 5% to 35%, applying assessed collection policies to reduce tax payments and evade withholding obligations. Duan analyzed that the determination of labor relationships is based on "actual employment management," not the paper form of "individual business." If the sole purpose is to pay less tax or evade platform withholding obligations, registering individual businesses in bulk without actual business premises or substance, and forcing the conversion of labor remuneration into business income, constitutes mismatching of income nature, exposing both platform enterprises and practitioners to tax-related risks.

Third, using "the platform has withholding obligations" as a reason to ignore the taxpayer's own obligations. Some practitioners misinterpret the platform's withholding obligation as a shield for their own tax obligations. The Guo Xinxin case is a typical negative example. Duan explained that platform withholding only targets specific income and specific stages; it does not cover all of a practitioner's income, nor all tax types and all tax stages, and certainly cannot change the practitioner's legal status as a taxpayer. For income not withheld, under-withheld, incorrectly withheld by the platform, or outside the platform's withholding scope, practitioners must still declare and pay in full in accordance with the law.

Compliant operation and lawful tax payment are long-term strategies for healthy platform economy development

Responsibility boundaries have been clarified, and failure to fulfill statutory obligations will inevitably result in corresponding legal consequences. According to the Regulations and supporting documents, if a platform enterprise fails to report tax-related information as required, tax authorities will order correction within a time limit; if correction is not made within the deadline, a fine of RMB 20,000 to RMB 100,000 will be imposed; in serious cases, the enterprise will be ordered to suspend business for rectification and fined RMB 100,000 to RMB 500,000. If a platform enterprise falsely handles withholding declarations or agency declarations, tax authorities will pursue liability in accordance with the law and include the relevant circumstances in tax payment credit evaluation management.

Duan reminds that the platform economy is entering a new stage of development that places greater emphasis on standardization, quality, and sustainability. Compliant operation is the foundation for steady and long-term development. Platform enterprises must fulfill statutory responsibilities such as information reporting and withholding; within-platform operators must fulfill primary responsibilities such as registration, declaration, tax payment, and invoicing; practitioners must fulfill personal responsibilities such as truthful declaration and lawful enjoyment of tax preferences. A single agreement cannot stipulate away statutory responsibilities; a single identity packaging cannot conceal the substance of a business. Only when all types of platform economy entities fulfill their respective roles and responsibilities can the platform economy unleash greater vitality through standardized operations.