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On Wednesday, the Shanghai tax authority fined e-commerce firm PDD Holdings for failing to rectify tax information within a specified period, according to the Xinhua News Agency. 

The Changning District Tax Bureau of Shanghai, State Taxation Administration said that Shanghai Xunmeng Information Technology, an operating entity of Chinese e-commerce platform PDD Holdings, failed to report tax-related information as required by the Regulations on the Reporting of Tax-Related Information of Internet Platform Enterprises, and has been ordered by the tax authorities to rectify the issue within a specified period.

Although the company took corrective measures, it failed to complete the rectification within the required timeframe. As a result, the bureau imposed a penalty of 100,000 yuan ($14,000) on PDD Holdings in accordance with the law, the tax bureau said.

According to reports, after the above-mentioned regulations were issued and implemented in 2025, PDD Holdings failed to submit tax-related information for platform operators and practitioners for the third quarter of 2025 as required. In November 2025, the Changning tax bureau issued a notice, ordering the company to rectify the issue within a specified period, but they failed to do so. Consequently, the bureau imposed such penalty on PDD Holdings in accordance with the law.

The E-commerce Law and the Regulations on the Reporting of Tax-Related Information of Internet Platform Enterprises stipulate that if an internet platform enterprise fails to report tax-related information as required, the tax authority shall order it to rectify within a specified period. Failure to comply by the deadline will result in a fine ranging from 20,000 to 100,000 yuan. In serious case, the enterprise may be ordered to suspend business for rectification and may additional face a fine of 100,000 to 500,000 yuan.

Fan Yong, dean of the School of Public Finance and Taxation at the Central University of Finance and Economics, noted that internet platform enterprises are currently reporting tax-related information for the fourth quarter of 2025. Platform enterprises have a legal obligation to fulfill their information reporting requirements. Failure to comply may trigger legal consequences. In serious cases, tax authorities may escalate penalties, including the possibility of mandated suspension of operation for rectification, according to the Xinhua.

Xu Sheng, a research fellow at the Economic Research Institute of the National Development and Reform Commission, China's top economic planner, told Xinhua that the introduction and implementation of the Regulations on the Reporting of Tax-Related Information of Internet Platform Enterprises are important measures to improve the regular regulatory system for the platform economy. 

The punishment imposed by tax authorities on PDD in accordance with laws and regulations carries far greater significance as a warning and educational measure than the amount of the fine itself. It plays an important role in standardizing the order of the platform economy and promoting fair competition, Xu said.

Major platform enterprises should actively comply with relevant laws and regulations, take the lead in fostering a legal and fair competitive environment and promote the long-term healthy development of the industry while ensuring their own standardized growth, Xu added.


Global Times