Yiwu Business Owners: Always Telling Customers “No Invoice”? Lending Out Your Accumulated “Surplus Invoices”? Official “Invoicing on Transaction” Is Here — Get the Figures Straight

Owners minding stalls at the International Trade City and Huangyuan Market have probably all had this exchange recently: a customer picks up a box of goods and asks at checkout, “Can you issue an invoice?”, and you reply, “It's two points more if you want an invoice, cheaper without.” The same goes for livestream sellers in Beixiazhu: a single livestream can bring hundreds of orders, many buyers never mention invoices at all, and the orders simply sit marked “not invoiced” in the back office.

In the past, this approach depended on transactions being “small, scattered and checked by no one”. But starting in 2026, things have changed: the tax authorities have introduced “invoicing on transaction” (交易即开票) — the moment a transaction is completed, the system automatically pre-fills the information, immediately issues a fully digitalized e-invoice and pushes it to the buyer; at the same time, platform data is also reported to the tax authorities every quarter. For the first time, the money you receive, the goods you ship and the invoices you issue have a chance to be automatically reconciled by the system.

1. Just released: five typical “invoicing on transaction” cases

On 4 September 2026, the website of the Zhejiang Provincial Tax Service of the State Taxation Administration published “Guiding Business Entities in Final Consumer Markets onto the Path of Compliance” (《引导终端消费经营主体走好合规路》); source: China Tax News, reporter Yu Lijiao. It states: “Invoicing on transaction” is an innovative service measure introduced by the tax authorities in response to the rapid digital development of the economy and society. When a transaction is completed, the system can automatically pre-fill the information, issue a digitalized electronic invoice immediately and push it to the consumer, effectively addressing problems in invoice administration such as “not issuing invoices, difficulty in issuing invoices, and surplus invoices”.

In the same report, tax authorities in the Yangtze River Delta region, focusing on high-frequency scenarios in final consumer markets, jointly published five typical tax compliance cases of pilot enterprises applying “invoicing on transaction” across different sectors:

• Refined oil retail (Shanghai Zhongfangji Automotive Service): implemented “one fuelling transaction, one corresponding invoice, one precise data match” and built a data closed loop covering “transaction — invoicing — accounting — filing”;
• Beauty e-commerce (Hangzhou Yige Cosmetics, owner of the “Florasis” brand): launched “invoice on order” by directly connecting its data with Tmall through the “Leqi” platform; it issues invoices smoothly even at peak volumes of thousands of orders per second, has issued a cumulative 4.18 million invoices worth CNY 1 billion, and has cut invoice-related complaints by more than 15%;
• Parking (Ningbo Hefeng Creative Plaza): data verification and invoicing are completed simultaneously when a vehicle's departure generates an order, cutting the time to issue a single invoice from minutes to seconds; a cumulative 52,000 invoices have been issued;
• Private hospital (Tongling Bo'ai Hospital): after payment, the system issues the invoice seamlessly and pushes it automatically; nearly 20,000 invoices worth CNY 49 million have been issued;
• Pharmacy chain (Jiangsu Tongzheng Pharmaceutical, 36 stores): manual invoicing workload fell by 80%, and the share of revenue without invoices dropped to 2%.

Note that last figure: the share of revenue without invoices dropped to 2%. Once invoicing is systematized, “revenue without invoices” is squeezed to almost zero — and once it is listed separately, it becomes the most conspicuous item on the books.

2. Why this matters especially to Yiwu business owners

Some owners will say: I am not a petrol station or a hospital, so what does this have to do with me? Quite the opposite — Yiwu's transaction structure is exactly where “high-frequency final consumption + small amounts + no invoicing” is most concentrated.

• Retail and scattered orders at the Trade City and Huangyuan Market: a single stall may take dozens or hundreds of payments a day by cash, WeChat or Alipay; a casual “no invoice” here and there adds up to hundreds of thousands or even a million yuan of uninvoiced revenue over a year;
• Flash-sale orders at Beixiazhu and livestream bases: low average order value, high order volume, mostly individual buyers, and almost nobody asks for an invoice;
• Everyday services such as restaurants, accommodation, parking and pharmacies: demand for invoices is random and amounts are fragmented, making them the easiest places to skip invoicing “while you're at it”;
• Platform data is already being reported: under Decree No. 810 of the State Council, the Provisions on the Reporting of Tax-Related Information by Internet Platform Enterprises (《互联网平台企业涉税信息报送规定》, effective 20 June 2025), e-commerce, livestreaming and other platforms must report the identity information and revenue data of operators on their platforms to the tax authorities every quarter. The revenue a platform reports and the invoices you issue yourself ought, in principle, to match.

In other words, in the past “no invoicing” meant nobody could see it; now the platform reports one layer of data and invoicing on transaction adds another, and with the two stacked together, “invisible revenue” will keep shrinking.

3. Three calculations: how much you save by not invoicing, and how much you must repay if caught

Take a small-scale taxpayer retail store in Yiwu as an example, assuming CNY 1 million of retail revenue in a year was neither invoiced nor declared.

Calculation 1: What you think you have saved

• VAT: at the small-scale taxpayer levy rate of 3% reduced to 1%, approximately CNY 10,000;
• Surcharges (urban construction tax, education surcharges, etc.): these follow VAT, so only about CNY 1,000-plus a year;
• Individual income tax or corporate income tax: book “profit” is lower as a result, saving another amount.

Calculation 2: What you must repay after an investigation

That is without counting the most painful item: if this is determined to be tax evasion, the amounts are “aggregated”. Many owners are undone not by this one million but by the several million accumulated over three to five years.

Calculation 3: The real high-voltage line — “surplus invoices”

It is significant that the official article lists “surplus invoices” alongside “not issuing invoices” and “difficulty in issuing invoices”. A “surplus invoice” means your input invoices (invoices obtained on purchases) exceed your output invoices (invoices you issue), leaving some “unused” quota on the books. When a peer borrows that quota, they will often pay you a “handling fee” of three to five points.

The money looks like a windfall, but in nature it is fraudulent invoicing. The Measures of the People's Republic of China for the Administration of Invoices expressly prohibit fraudulent invoicing in any form; where the amount reaches the threshold, it may also trigger Article 205 of the Criminal Law of the People's Republic of China, the crime of fraudulently issuing special VAT invoices. Moreover, the buyer's input tax will be reversed out, with additional tax and late-payment charges, and when the investigation traces back, the first person it finds is you, the issuer.

4. Four things Yiwu business owners should do right now

1. Check your uninvoiced revenue. Pull the transaction records from your POS system, WeChat and Alipay merchant back offices and livestream back office, and reconcile them against your declared sales figures to see where the gaps are.
2. Make invoicing second nature. Fully digitalized e-invoices now require no tax-control device and no paper invoices, and can be issued from a phone or a computer; for high-frequency scenarios such as restaurants, retail and parking, ask your competent tax authority whether an “invoicing on transaction” integration is available.
3. Clean up “surplus invoice” dealings. Stop early and sort out the invoices you issued for others in the past and the “handling fees” you collected; do not let it keep rolling.
4. Keep your vouchers. Uninvoiced revenue is still revenue, and the corresponding cost vouchers for purchases, rent, labour and freight must all be retained — otherwise, when additional tax is assessed, you cannot even deduct your costs, and that is a real loss.

5. Frequently asked questions

Q1: If the customer says they do not want an invoice, does that mean I do not have to declare?

A: No. Whether to issue an invoice is the customer's choice, while whether to declare is your statutory duty; the two are not the same thing. Even if the customer does not want an invoice, the revenue must still be recorded and declared. Only small-scale taxpayers with monthly sales of CNY 100,000 or less (inclusive) enjoy the VAT exemption, and this exemption policy applies until 31 December 2027 — but exemption does not mean you can skip declaring.

Q2: I only sell around CNY 100,000 a month; will the tax office really pay attention to such small amounts?

A: These days it is mostly automated system comparison rather than people watching individuals. The platform reports one layer, invoices another and bank statements another; where differences are large, a risk alert is generated first and then verified by the competent tax authority. Being small does not mean you will not be flagged.

Q3: A peer wants to borrow my “surplus invoices” and offers me a 3-point handling fee. Is it worth it?

A: Not worth it at all. For a 3-point fee you are gambling on additional tax, late-payment charges, a fine of 0.5 to 5 times the tax, plus your tax credit rating and possible criminal liability. And since neither the goods nor the money in that transaction passed through you, if any link in the chain goes wrong, the trail will follow the invoice and lead straight to you.

Q4: Does adopting “invoicing on transaction” require spending a lot on system upgrades?

A: In the official cases, the car park carried out an automated upgrade on its existing smart parking system, and the pharmacy relied on the “Leqi” platform to integrate transactions and invoicing automatically. In other words, the work is built around your existing checkout and business systems, not a start-from-scratch rebuild. As for how exactly to connect, the safest approach is to consult your competent tax authority directly, or have a service provider familiar with fully digitalized e-invoices carry out an assessment first.

Q5: For orders on a platform, the platform has already reported the data to the tax authorities — do I still need to issue invoices myself?

A: Yes. What the platform reports is “revenue information”, not “invoices”. When a buyer asks you for an invoice, the obligation to issue it remains with you; only when the two sets of data match are you compliant.

6. Sources

• Zhejiang Provincial Tax Service of the State Taxation Administration, “Guiding Business Entities in Final Consumer Markets onto the Path of Compliance” (《引导终端消费经营主体走好合规路》), China Tax News, 4 September 2026, reporter Yu Lijiao: https://zhejiang.chinatax.gov.cn/art/2026/9/4/art_13226_659664.html
• Policy and Regulation Library of the Zhejiang Provincial Tax Service of the State Taxation Administration: http://zhejiang.chinatax.gov.cn/col/col13300/index.html
• Measures of the People's Republic of China for the Administration of Invoices (《中华人民共和国发票管理办法》, revised by Decree No. 764 of the State Council): fraudulent invoicing is prohibited, and the payee shall issue an invoice to the payer
• Tax Collection and Administration Law of the People's Republic of China (《中华人民共和国税收征收管理法》), Article 32 (late-payment charges of 0.05% per day) and Article 63 (determination and punishment of tax evasion)
• Criminal Law of the People's Republic of China (《中华人民共和国刑法》), Article 205 (crime of fraudulently issuing special VAT invoices)
• Decree No. 810 of the State Council, the Provisions on the Reporting of Tax-Related Information by Internet Platform Enterprises (《互联网平台企业涉税信息报送规定》, effective 20 June 2025)
• Value-Added Tax Law of the People's Republic of China (《中华人民共和国增值税法》, effective 1 January 2026) and its supporting implementation regulations

Business in Yiwu depends on being “fast” and “steady”. With invoices, the old approach was “stall as long as you can”; now it is “the earlier you sort it out, the more you save”. If you are not sure how much uninvoiced revenue you have on your books or whether you have a history of “surplus invoice” dealings, send us the details and Jinfan Tax & Finance will work through these figures with you.

Jinfan (Yiwu) Finance & Tax Management Co., Ltd. — ten years of local Yiwu tax and finance experience, serving business owners at the International Trade City, Huangyuan Market and Beixiazhu.