Could Internet-based Freight Transportation Learn from "Reverse Invoicing"? Supporting Tax Policies for "Three Types of Invoices" Are Also Needed

 

Editor's Note: Recently, the Director of the Investigation Bureau of the State Taxation Administration stated in an article that recent cases investigated and handled by tax audit departments have focused on industries such as internet-based freight transport platforms, which also signals the key directions for tax audits in 2026 and beyond. This article will analyze the regulatory trends concerning tax-related risks in the internet-based freight transport industry based on newly introduced policies this year and explore the feasibility of implementing "reverse invoicing" in this sector.

I. Policy and Regulatory Forces Working in Tandem, Driving Standardized Development of Internet-based Freight Transport

(I) New Regulations on Tax-Related Information Reporting Promote Operational Data Transparency

On June 20, 2025, the *Regulations on the Reporting of Tax-Related Information by Internet Platform Enterprises* (State Council Decree No. 810) officially came into effect. To implement these regulations, the State Taxation Administration successively issued the *Announcement on Matters Concerning the Reporting of Tax-Related Information by Internet Platform Enterprises* (State Taxation Administration Announcement No. 15 of 2025) and the *Announcement on Several Matters Concerning Withholding Declarations and Proxy Declarations for Platform-Based Practitioners by Internet Platform Enterprises* (State Taxation Administration Announcement No. 16 of 2025). These two announcements provide detailed provisions on key operational matters such as the scope, content, timelines, methods, and penalties for non-compliance regarding tax-related information reporting, covering eight categories of platforms including internet-based freight transport.

For the internet-based freight transport industry, these new regulations not only clarify the information reporting obligations of platforms but also enhance the transparency and traceability of key operational data by bringing transaction records, payment records, and practitioner income data into the purview of tax supervision. On one hand, this helps tax authorities more accurately identify tax-related risks and improve their ability to investigate and address illegal activities such as fraudulent invoicing and concealed income. On the other hand, it incentivizes platform enterprises to strengthen internal compliance management, thereby promoting the entire industry's development towards greater standardization and sustainability at an institutional level.

(II) New Rules on Fuel (Energy) Consumption and Toll Fee Deductions Landed, Yet Implementation Details Await Clarification

In August of this year, the *Announcement by the Ministry of Finance and the State Taxation Administration on Clarifying VAT Policies for Express Delivery Services, etc.* (Ministry of Finance and State Taxation Administration Announcement No. 5 of 2025, hereinafter "Announcement No. 5") was released. It clarified that, under specified conditions, internet-based freight transport platforms may deduct the corresponding input VAT on vehicle fuel (including refined oil, natural gas, electricity, etc.) they procure and provide to actual carriers for use, as well as on road, bridge, and lock tolls they pay, from their output VAT.

Compared with the previously issued *Announcement of the State Taxation Administration on VAT Issues Such as Tax Exemption Filing for Cross-border Taxable Activities* (State Taxation Administration Announcement No. 30 of 2017, hereinafter "Announcement No. 30"), Announcement No. 5 provides a clear policy basis for internet-based freight transport platforms to obtain fuel (gas) invoices and toll invoices for input VAT deduction, helping to reduce the tax burden on platforms. However, several practical issues remain in specific implementation:

First, as the proportion of energy costs like fuel increases, existing restrictions on the proportion of fuel invoices eligible for deduction may lead to insufficient deductions for platforms. Second, in the process of deducting fuel and other energy consumption invoices, how to calculate the consumption of fuel, gas, etc., for different transport operations, and how to ensure that such fuel/gas corresponds to the specific transport operation. Third, consumables like tires are used frequently, wear out quickly, and come in many varieties, also constituting part of transport industry costs. How platforms can deduct these remains unclear.

(III) Industry-Specific Regulations Strengthen Inter-departmental Information Sharing and Coordinated Supervision

In November this year, the Ministry of Transport released the *Interim Measures for the Management of Road Freight Transport Operations via Online Platforms (Revised Draft for Comments)* (hereinafter "Draft for Comments"). Compared with the 2019 version, this revision further clarifies the classification of internet-based freight transport operators, specifying them as "Carrier Type" and "Information Transaction Matching Type," with a focus on setting regulatory requirements for Carrier Type operators.

On one hand, the Draft for Comments explicitly states for the first time regarding fund settlement that "the payee must be consistent with the actual carrier," strengthening constraints on business authenticity from the fund flow perspective. On the other hand, it stipulates that "document information shall be shared with tax authorities at the same level through the national integrated government big data system." This will significantly improve the efficiency of data exchange between transport and tax authorities, promoting linked supervision between operational information and tax data.

Furthermore, the Draft for Comments establishes an inter-departmental joint governance mechanism, clarifying that if internet-based freight transport operators commit tax-related violations such as fraudulent invoicing, in addition to being dealt with and penalized according to law by tax authorities, transport departments may also impose penalties according to relevant regulations if such actions lead to abnormal industry operation monitoring results.

II. Predictions for Key Areas of Tax Supervision in Internet-based Freight Transport for 2026

(I) Fraudulent Fuel and ETC Invoices

According to Announcement No. 30 and Announcement No. 5, some platforms deduct input VAT by obtaining fuel and ETC invoices. Specifically, there are three models: First, the platform signs cooperation agreements with refined oil enterprises or gas stations, and drivers settle payments publicly on an annual basis after refueling. Second, fueling platforms solve the refined oil invoice issue for the freight transport platforms. Third, some fueling platforms establish trading companies, connecting with gas stations on one end and with shippers on the other. The transaction chain is "Gas Station - Fueling Platform - Freight Enterprise," where the freight enterprise's refined oil invoices come from these trading companies of the fueling platforms.

These three models to some extent address the platforms' input VAT challenges, but in practice, they all carry certain tax risks and remain key targets for tax audits. The risk in Models One and Two lies in the requirement under Announcement No. 30 that refined oil invoices can only be deducted if the oil is used for freight transport business. If platform technology cannot guarantee the consistency of "driver - vehicle - fuel," the platform will easily face questions about business authenticity, potentially leading to risks of back taxes, late payment penalties, or even being classified as fraudulent invoicing or tax evasion. The risk in Model Three is that the trading company does not actually participate in the refined oil transaction; the oil flows directly from the gas station to the driver. If the business rationality and authenticity cannot be guaranteed, the trading company may be deemed a "pass-through invoice" enterprise by tax authorities, facing the risk of being classified for fraudulent invoicing. In this case, the internet-based freight transport platform may be implicated, facing risks of being classified for fraudulent invoicing or tax evasion. Accordingly, in practice, tax authorities have already taken measures such as setting reasonable ranges for truck fuel consumption per 100 kilometers and limiting the proportion of fuel invoices eligible for deduction to prevent fraudulent invoicing risks.

(II) Using Unofficial Receipts, Self-made Vouchers for Bookkeeping, or Failing to Obtain Compliant Invoices

The core business model of internet-based freight transport platforms typically involves facilitating transactions or integrating scattered service resources. Their main cost expenditure is payments to individual service providers, micro-enterants, or partners on the platform. However, these counterparties often cannot provide compliant invoices, or the documents they provide do not meet tax regulations. This leaves platforms facing a lack of proper vouchers when declaring corporate income tax and deducting costs, often having to rely on internal payment records, bank statements, and online agreements for bookkeeping. Such practices clearly do not comply with the *Measures for the Administration of Pre-tax Deduction Vouchers for Corporate Income Tax* and are also a key focus of tax audits. This may expose platforms to tax risks, potentially resulting in corporate income tax being recouped along with late payment penalties.

(III) Invoice Recipients Using Platforms to Retroactively Issue Invoices for Already Completed Transactions

Whether in internet-based freight transport or flexible employment, a common scenario in these platform models facilitating transactions is: the transacting parties have already completed the service or goods delivery offline and settled payments, but due to failing to obtain compliant invoices promptly, they turn to the platform to "re-create" the transaction process to obtain invoices. In such operations, the demand side contacts the platform to issue retrospective invoices to meet requirements for input VAT deduction or cost documentation. To earn service fees, platforms typically require both parties to "re-sign" electronic contracts and re-enter transaction information online, "importing" data of the already completed offline business into the platform system, and generating corresponding online orders and invoices based on this.

Although the economic activity genuinely occurred, the platform's involvement and the construction of the online transaction process are significantly later than the actual completion time of the substantive transaction. This results in key information recorded on the invoices issued by the platform—such as transaction time, contracting parties, and order records—being seriously inconsistent with the objective process, parties, and timeline of the actual business occurrence. Therefore, during review, tax authorities may determine that such retrospective invoicing deviates from a genuine and timely transaction context, raising suspicion of fraudulent invoicing. Even if funds and services are real, the invoicing act itself may still be classified as fraudulent. Related enterprises may face consequences such as disallowed input VAT deduction, non-deductible costs, subsequent penalties like back taxes, fines, late payment penalties, and even potential criminal risks.

III. Extended Discussion: Does Internet-based Freight Transport Have the Conditions for "Reverse Invoicing"?

Recently, industry views have suggested that since "reverse invoicing" has effectively alleviated the "difficulty in obtaining invoices" in the resource recycling industry, introducing it into the internet-based freight transport industry, which also struggles with invoice acquisition, might systematically address the tax management challenges of this industry. This suggestion warrants in-depth discussion.

(I) Internet-based Freight Transport is Similarly an Industry Lacking Source Invoices

Internet-based freight transport shares some similarities with the resource recycling industry. Both primarily engage with a large number of unregistered natural persons (e.g., individual drivers and recyclers), causing practical difficulties for enterprises in obtaining compliant invoices, thereby increasing the overall tax burden. Simultaneously, these natural persons, due to higher personal income tax burdens and complex collection and administration, have long remained at the fringes of tax supervision.

(II) Implementing Reverse Invoicing in Internet-based Freight Transport Requires Supporting Policies

Although State Tax Circular No. 55 (2017) allowed drivers to apply for special VAT invoices on behalf of others, its complex procedures limited its practical implementation. In this context, implementing "reverse invoicing" for driver freight charges is seen as a feasible solution. However, it should be noted that the resource recycling industry's ability to implement "reverse invoicing" was accompanied by a set of supporting policies such as simplified tax calculation, immediate VAT refund-upon-collection, and personal income tax assessment. Therefore, if "reverse invoicing" is introduced in the internet-based freight transport industry, matching collection and administration mechanisms must be designed simultaneously, especially to properly resolve the personal income tax issue for drivers. Only by combining it with the energy invoice and toll fee invoice deduction policies clarified in Announcement No. 5, forming a policy package of "energy invoice + toll fee invoice + reverse invoicing for freight charges," can the tax-related dilemmas faced by the internet-based freight transport industry be resolved.

(III) Tax Compliance Under the "New Three Invoices" Context Should Be Based on Technological Development

Under the coordinated management of the "three types of invoices," the future internet-based freight transport industry should actively leverage technologies like big data and artificial intelligence to build a compliance system covering the entire business chain. Specifically: First, for energy invoices, full-process digital management from platform procurement, driver usage, vehicle consumption to invoice verification should be achieved, ensuring each energy expenditure corresponds to an actual transport operation. Second, for toll fee invoice management, multi-dimensional cross-verification can be conducted by combining ETC passage records, waybill information, payment records, and invoice data to ensure the authenticity and relevance of incurred expenses. Third, by collecting and comparing data across pre-event, in-process, and post-event stages, the ability to verify business authenticity can be enhanced, promoting sustainable industry development within a compliant framework.

IV. Summary

Currently, the internet-based freight transport industry is gradually moving towards transparency and compliance under policy standardization and regulatory strengthening. Future supervision will focus more on invoice authenticity, business matching, and the legitimacy of cost vouchers. In this context, exploring the applicability of "reverse invoicing" in this industry holds practical significance. However, it requires systematic design of supporting collection and administration measures, balancing efficiency and fairness, to effectively promote the healthy development of the industry.