The OECD’s Model Reporting Rules for Digital Platforms—and China’s New Approach
As the digital economy grows, both international organisations and national governments are increasing efforts to ensure tax compliance in online marketplaces.
The OECD’s Model Reporting Rules for Digital Platforms (MRR) are already shaping tax reporting for platform operators in dozens of countries.
Recently, China joined this global movement with robust new regulations, further signalling a worldwide trend towards greater transparency.
What Are the OECD Model Reporting Rules?
The MRR, first introduced in 2020, established a global standard for how digital-platform operators must gather and report data on sellers - whether those sellers are renting homes, providing ride-share services, or selling goods.
As of August 2025, 31 jurisdictions have signed the multilateral competent authority agreement for the automatic exchange of information under the OECD’s Model Reporting Rules for Digital Platforms (MRR), and many of these - including the UK, EU member states, and others - are implementing or have implemented legislation requiring platform reporting.
The figure continues to rise as more countries adopt the global standard for tax transparency in the digital economy.
Who Must Comply?
- Platform Operators: Any business managing a digital platform may be included. This covers platforms for accommodation rentals (like Airbnb), ride-sharing (like Uber), personal services (like TaskRabbit), and - optionally - the sale of goods and vehicle rentals.
- Jurisdiction Considerations: Operators must report if they are incorporated, tax-resident, managed, or have a permanent establishment in a participating jurisdiction, or if they facilitate transactions connected to that jurisdiction.
- Exclusions: Operators without reportable sellers or those involved only in excluded activities (such as payment processing) may be exempt.
What Information Must Be Reported?
Each year, usually by 31 January, platforms must gather and report to the local tax authority:
- Seller identification details (name, address, Tax Identification Number, date of birth/business number).
- Jurisdiction of tax residence.
- Total compensation paid/credited, number of transactions, and (if relevant) property addresses.
- The same information must also be provided to each seller for their records.
Due Diligence and Verification
Platforms are required to implement “due diligence” checks:
- Collect information as sellers register on the platform.
- Verify the authenticity of seller-provided data via documents or third-party checks.
- If seller residency cannot be determined, default to the jurisdiction where the property or bank account is located.
How Is the Data Used?
After collecting the data, platforms submit it to their home country’s tax authority. This authority then shares the data with the jurisdictions where each seller is tax resident (and for property rentals, where the property is located), according to multilateral agreements.
Why Do These Rules Matter?
- Closing Visibility Gaps: Many transactions in the sharing and gig economy were previously hidden from authorities, making it difficult to enforce tax compliance.
- Consistency across platforms: The MRR provides a unified reporting standard, reducing the risk of fragmented or conflicting national laws.
- Fairness: Ensures online sellers and service providers are subject to the same tax expectations as their traditional counterparts.
Timeline and Penalties
The initial reports are due in early-adopter countries by 31 January 2025, covering activities in 2024. Non-compliance may lead to penalties, including substantial fines and, in some cases, criminal sanctions. Platforms must also retain records for at least five years.
China’s New Reporting Obligations (State Council Order No. 810, 2025)
On 20 June 2025, China’s State Council issued Order No. 810, a significant step aligning the country’s online platform operator requirements with the OECD’s global framework.
What’s New in China?
- Quarterly Reporting: Unlike the annual schedule in many OECD-adopting countries, Chinese platform operators are required to submit quarterly reports on the identity and income of merchants and individual workers on their platforms. The first report must be submitted by 31 October 2025, covering Q3 2025.
- Who’s Covered: All e-commerce and profit-driven online platforms serving China, including overseas operators providing services “within China.”
- Information to Report: Platform details, merchant and worker identities, income amounts, and income sources. Some exemptions apply for public convenience services and revenue already reported through other tax channels.
- Additional Data on Request: In addition to regular reporting, platform operators must provide contracts, transaction records, and logistics information when requested by tax authorities.
- Withholding Obligations: New updates clarify how platform operators must withhold Individual Income Tax (IIT) and Value Added Tax (VAT) - including a revised formula designed to reduce IIT withholding in most cases, along with new VAT withholding requirements when income exceeds the threshold. The State Taxation Administration will actively identify when VAT withholding is necessary, utilising reported data.
- Compliance Focus: Foreign operators must also assess compliance with data protection obligations when transferring information outside China.
How Does China’s Approach Compare?
China’s new regime aligns with the broader OECD vision—ensuring digital income is visible and properly taxed. However, the Chinese regulation differs in frequency (quarterly, not annually), direct reach to foreign platforms, and the clear link with withholding mechanisms for income and value-added taxes. It demonstrates China’s determination to enforce tax compliance in its expanding online sector—including gig work, e-commerce, and cross-border services.
Why This Matters
Whether you run a global platform or a local marketplace, the clear message from both the OECD and China remains unchanged: transparency is here to stay. Platforms should focus on data accuracy, due diligence, and robust compliance systems, while merchants and service providers must be ready for increased tax transparency and enforcement.
Businesses operating in China or serving Chinese users should now review their operations and contracts, ensuring their systems can manage these new obligations alongside the global trend of digital economy tax regulation.
Get In Touch
For more information please contact Michael Velten.
michael@veltenadvisors.com
+6590687547
391B Orchard Rd, Level 22, Ngee Ann City Tower B, Singapore 238874
