Cross-border e-commerce sellers across China have been receiving a recurring notice from tax authorities — most recently from Shenzhen — flagging that their VAT export income appears to be under-reported. For many companies, the message came as a shock because they believed they had already filed their 9810 customs registration correctly. The confusion almost always traces back to one core question: when does a cross-border e-commerce export actually become revenue? The answer differs depending on whether you are filing VAT or corporate income tax (CIT), and getting it wrong can inflate your taxable income, trigger penalties, or both. This guide explains how the 9810 overseas-warehouse model works and how to recognize revenue correctly under both tax regimes in China.
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What Is the 9810 Cross-Border E-Commerce Model?
Customs supervision code 9810, formally named “cross-border e-commerce export to overseas warehouse,” was introduced by the General Administration of Customs (GACC) under Announcement No. 75 of 2020. It is a specialized channel for businesses that export goods in bulk to an overseas fulfillment warehouse before any individual customer has placed an order.
The operating logic is best summarized as “goods first, orders later.” A domestic company ships goods through customs and stores them in a warehouse abroad — an Amazon FBA facility, a third-party warehouse, or a self-operated facility — then fulfills individual orders directly from that warehouse once sales occur on a cross-border e-commerce platform. The result is a B2B2C structure that compresses delivery time for overseas buyers.
For foreign companies, the 9810 model typically operates through a China-registered trading company or WFOE that holds the import/export rights and customs filing. If you are structuring a cross-border e-commerce entity, see our guide on Shenzhen company registration and our bookkeeping and tax services for the supporting compliance layer.
Why Sellers Receive the VAT Notice
The Shenzhen notice that triggered this wave of questions is worth reading carefully, because it contains a specific rule many sellers overlook. It informs the taxpayer that, based on data analysis, their VAT export income may have been under-declared, and reminds them that export business qualifying for VAT exemption must be declared within the prescribed period. Under current rules, if a taxpayer fails to declare the tax-exempt export within 36 months, the transaction is treated as a domestic sale and becomes subject to VAT.
The notice asks the company to complete a self-inspection and file its VAT return, reporting the sales amount in the correct section of the VAT and surcharges return. If sales are settled in a foreign currency, the amount must be converted into RMB for reporting. Companies that act as export agents must also apply for a “Certificate of Export Goods on Agency Basis” and submit supporting documents, including the agency agreement, the customs declaration, and the principal’s business license.
Many sellers were confused because they had already completed their 9810 filing. The confusion is understandable: the notice concerns the timing of VAT reporting, not the substance of whether the export itself is legitimate. The key is to separate VAT filing mechanics from income recognition, which is where most companies go wrong.
VAT vs CIT: Two Different Revenue Rules
Here is the insight that resolves most disputes: VAT and corporate income tax follow independent legal bases and accounting logic when it comes to export revenue.
| Aspect | VAT (Export) | CIT (9810) |
|---|---|---|
| Revenue trigger | Customs declaration date / filing period | Terminal sale completed (delivery or customer sign-off) |
| Income amount | FOB value declared at customs | Actual platform sales / amounts actually collected |
| Legal basis | VAT Law and implementing rules | Accounting standards and business substance |
| Purpose | Determines VAT exemption/refund timing | Determines taxable profit |
After further confirmation with the tax authority, the seller’s earlier concern — that their CIT income recognition timing would be forcibly changed — turned out to be a misreading. The instruction to “confirm sales by customs declaration date” applies only to the VAT return filing basis. It governs when the VAT obligation arises. It does not adjust the point at which CIT revenue is recognized. For CIT, companies must still recognize income according to accounting standards and the economic substance of the transaction.
The practical consequence is that your VAT export income and your CIT export income will differ in any given period. At the annual CIT reconciliation, you should expect to explain that difference to your tax officer in writing. Preparing that explanation in advance — with matching records — is far easier than reconstructing it after a notice arrives.
When to Recognize 9810 Revenue
For corporate income tax, the 9810 revenue recognition basis is the actual terminal sales amount in the overseas market — not the value declared on the export customs declaration. The timing rule has two clear branches.
No revenue at customs departure
When goods clear customs and are placed into the overseas warehouse, this is only a transfer of inventory. Control of the goods, and the risks and rewards of ownership, have not yet transferred to any buyer. Therefore, no CIT revenue is recognized at the moment of customs exit.
Revenue at terminal sale
Revenue is recognized only when the warehouse stock generates a real order on the cross-border e-commerce platform and the goods are delivered to (or signed for by) the end customer. That is the point at which the sale is substantively complete.
How Much Revenue to Recognize
The amount recognized must be the actual transaction amount — the platform order price and the amount actually received from the customer — and it must be cross-verified against platform orders, collection records, and logistics documents. The FOB value estimated at the time of customs declaration serves only as the basis for customs supervision and VAT refund calculation. It must never be treated as CIT taxable income. The two figures must be kept strictly separate.
The taxable profit is then calculated as the actual sales amount minus the corresponding compliant costs, which include:
| Cost category | Examples |
|---|---|
| Procurement | Cost of goods purchased domestically |
| First-leg logistics | Freight and freight forwarding from China to the overseas warehouse |
| Warehouse | Overseas warehouse rent and storage fees |
| Platform fees | Marketplace commission and transaction fees |
| Marketing | Advertising and promotion spend |
| Domestic operations | Domestic operating and administrative costs |
Deducting these correctly is what keeps your taxable profit accurate — and it is exactly the kind of detail our China bookkeeping and tax team handles daily for cross-border sellers in Guangzhou and Shenzhen.
Two Ledgers: Practical Compliance
The single most reliable way to stay compliant under 9810 is to maintain two separate sets of records, a practice summed up as “accounting and tax in agreement.”
The first ledger supports your export VAT refund: it records the customs declaration amounts and any pre-refund data. The second ledger supports your financial and tax accounting: it records actual orders, actual collections, and each category of cost. Keeping the two aligned ensures your bookkeeping matches your tax filings, and it respects the principle of substance over form — the business must be genuine and the data fully traceable.
This level of record-keeping is difficult to retrofit. It is far easier to build it into your monthly bookkeeping workflow from the start, with the same discipline you would apply to legal compliance or payroll. If you already received a notice, a professional review can help you reconstruct the correct positions before your deadline to respond.
Frequently Asked Questions
What does 9810 actually mean?
9810 is a Chinese customs supervision code for “cross-border e-commerce export to overseas warehouse.” It allows a company to ship goods in bulk to an overseas warehouse first and fulfill orders later, rather than shipping each order individually from China.
Do I recognize revenue when goods leave China?
No — not for corporate income tax. Customs departure is only an inventory transfer. Revenue is recognized when a real order is completed and the goods are delivered to or signed for by the end customer.
Why did I get a VAT notice if I already filed 9810?
The notice concerns the timing of your VAT exemption filing, not the validity of your export. Under current rules, tax-exempt export income must be declared within 36 months; otherwise it is treated as a domestic sale and becomes VAT-liable.
Does the notice change my CIT revenue recognition timing?
No. The instruction to report by customs declaration date applies only to VAT filing. CIT revenue must still follow accounting standards and the substance of each sale.
What amount do I report as CIT revenue?
The actual terminal sales amount in the overseas market — platform order price and actual collections — verified against orders, receipts, and logistics records, not the FOB value on the customs declaration.
How do I explain the VAT-CIT difference at annual reconciliation?
Expect to provide a written explanation to your tax officer, supported by your two ledgers. Preparing it in advance with matching records makes the reconciliation routine instead of stressful.
If your cross-border e-commerce business is navigating 9810 revenue recognition, VAT exemption deadlines, or the annual CIT reconciliation in China, our team can help you build the right records and respond to any tax notice correctly. Contact Dan Young Business Consultancy to speak with a specialist who understands cross-border sellers in Guangzhou, Shenzhen, and beyond.
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or accounting advice. Tax rules and enforcement practices in China change frequently, and the application of the 9810 model depends on your specific facts and filing history. You should consult a qualified professional before acting on any of the information above.
