Many companies covet the lucrative Chinese consumer market. After all, what business wouldn’t want a piece of the estimated US $1.5 trillion in ecommerce sales that are expected in 2018 from more than 650 million buyers? Double digit growth rates are expected far into the future for Chinese ecommerce. Further, while Chinese giant Alibaba still accounts for more than half of total ecommerce sales, that share is falling as other companies invest aggressively in the region.

In short, there’s major opportunity. But to sell goods and services in the region, and make payments to partners, they need to understand and adhere to the fapiao tax receipts system -- a central element of the tax system throughout China.

This brief paper outlines the basics of the Fapiao system and how it impacts partner marketing in the region. It also explains how Partnerize can empower advertisers to deliver partner marketing programs in China that are fully compliant with fapiao rules and regulations.


A fapiao is a legal receipt that serves as proof of purchase for goods and services. The Chinese State Administration of Taxation (SAT) requires businesses to use fapiao so as to ensure businesses PREPAY taxes on future sales of goods and services. Note that this is different from most Western taxation systems that require businesses to pay tax after revenue is driven.

SAT issues and administers fapiao. All businesses must purchase fapiao according to the scope and size of their turnover. Issuance of fapiao is confirmation that cash has changed hands and is taxable. In the context of ecommerce, retailers must buy fapiao for the government for future sales they expect to drive. Fapiaos ensure that merchants pay taxes on all transactions. A company’s tax burden is determined by the SAT based upon the number and value of fapiao that have been purchased by the merchant for a period.

Originally, fapiao were issued as paper documents but nowadays merchants can purchase and receive electronic fapiao, which radically simplifies the process of tax compliance. For partner marketing, advertisers must purchase fapiao for the money that they give to partners in exchange for traffic and sales. Partners must buy fapiao and report them to advertisers as proof that they have fulfilled their legal obligations for tax payment.