In 2026, China's export tax enforcement landscape has undergone a fundamental shift. Regulatory focus has moved beyond merely cracking down on tax refund fraud to demanding answers to a deeper question: "What is the true commercial logic behind this export?" Driven by big data and AI technologies, customs, tax, foreign exchange, and banking data are now cross-referenced in real time. Consequently, the customs declaration has replaced the invoice as the core data anchor for compliance reviews.

Current enforcement trends are particularly prominent in four areas:

1. Scrutinizing Product Ratio Reasonableness: AI systems can now automatically flag implausible declarations. For instance, if a company bundles self-produced goods with non-refundable purchased accessories on a single declaration, an anomalous ratio (e.g., 10,000 spare parts for 1 machine) will easily trigger system alerts and intensive audits.

2. Re-evaluating Sample Export Authenticity: If a disproportionately high share of exports is declared as "advertising samples" without corresponding foreign exchange collection, authorities will deem it commercially unreasonable—even without fraudulent intent. These goods will be recharacterized as deemed domestic sales, subject to VAT and late payment surcharges.

3. Monitoring Foreign Exchange Collection Deadlines: A complete export cycle requires proceeds to be collected, typically by April 30 of the year following the export. Failure to collect export revenue for more than 3 years may risks reclassification as deemed domestic sales, triggering a full 13% VAT liability.

4. Tax Deregistration as the Ultimate Stress Test: Applying for tax deregistration triggers a comprehensive historical review. Declarations from five or even ten years ago may be scrutinized. If a company cannot provide complete records regarding invoice issuance and input VAT treatments, the deregistration process will be suspended.

Facing these stringent trends, exporting enterprises must take four immediate actions: establish comprehensive customs declaration ledgers; implement foreign exchange collection trackers with deadline alerts; proactively and compliantly declare samples and gifts; and engage professional firms for annual tax health checks. In the era of data-driven enforcement, proactive compliance is always superior to reactive damage control.

At PHC Advisory, we can offer you full support on matters regarding doing business in China, or any other issues your business may face. If you would like to know more about policies relevant to your business in Italy or Asia, please contact us at info@phcadvisory.com.  

PHC Advisory is a company of  DP Group: an international professional services conglomerate of companies with approximately 100 experienced professionals worldwide. We offer comprehensive services in tax, accounting, and financial consulting, including financial supervision, financial audit, internal audit, internal control over financial reporting, and support for audited financial statements and annual audits, ensuring clients' financial transparency and compliance. 

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The content of this article is provided for informational purposes only, financial advice must be tailored to the specific circumstances on a case-by-case basis, and the contents of this article do not legally bind PHC Advisory with the reader in any way. 

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