Cloud account: "King of Spiritual Workers" who pays taxes for 84 million people

The headquarters of Cloud Account is located in Tianbai Center, Tianjin High tech Zone. (Cloud account provided/image)Starting from the Tianjin Municipal Government, drive west for 12 kilometers to reach the Tianbai Center of Tianjin High tech Zone

The headquarters of Cloud Account is located in Tianbai Center, Tianjin High tech Zone. (Cloud account provided/image)

Starting from the Tianjin Municipal Government, drive west for 12 kilometers to reach the Tianbai Center of Tianjin High tech Zone.

Cloud account, an internet company, is located in this tall building. From entrepreneurship to revenue of nearly 100 billion, cloud accounts only took 6 years. In contrast, it took 11 and 13 years for JD and Alibaba, and 7 years for ByteDance and Pinduoduo.

One ID card can only apply for one cloud account. As of May 31, 2023, the cloud account has served over 84 million people, making it the largest in the industry.

Heilongjiang Province, with the highest number of users, has 17 out of every 100 Heilongjiang residents between the ages of 15 and 64 who have received income through cloud accounts.

The results of the ninth survey on the status of the national workforce released by the All-China Federation of Trade Unions at the end of March 2023 show that there are 84 million new forms of employed workers in China.

Cloud accounts call them new forms of employed workers. The anchors, takeaway boys, Ridesharing company drivers, homemaking aunts, etc. are the most familiar groups. Cloud accounts generate nearly a hundred billion yuan in revenue, with most of it paid to workers.

How should these people pay taxes on the income they receive from internet platforms? Cloud accounts have explored a set of solutions that balance the interests of the government, platforms, and employees.

Over the past seven years, flexible employment platforms have flooded a large number of entrepreneurs. JD, Tencent and ByteDance have all invested in or founded similar companies, but only cloud accounts have become "invisible champions".

Run through the entire mode first

Cloud account is a typical internet company, with open offices without single rooms, adjacent workstations for employees and executives, and no partitions or walls. Young people come and go in the office area wearing loose T-shirts and perforated shoes, where handmade items and dolls can be seen everywhere. Founder Yang Hui's workstation is located in a corner.

Yang Hui was born in 1986, but his employees call him "Lao Yang". He was wearing a wrinkled light blue shirt and thick framed glasses. He spoke softly and bent down when shaking hands with people. When he hears affirmation and praise, his expression may be a bit cramped and uneasy, and then he humbly repeats, "There's still a lot of room.

He attributed the success of cloud accounts mainly to external factors, "Are we the most hardworking, intelligent, and outstanding people in this industry? Obviously not necessarily. The main reason is that the country's business environment is good, and party committees and governments at all levels have promoted our growth.

Peers criticize cloud accounts and are not allowed to retaliate. Negative information discovered in online public opinion is not allowed to be processed. Bidding on the same platform and criticizing competitors are not allowed. This is the "magic weapon" formulated by cloud accounts to cope with industry competition.

"If you want to talk about competitors, you are likely to fall into Cut throat competition." Yang Hui said that the cloud account's bid will be strictly reviewed, and it is not allowed to compare with peers.

In his opinion, by doing so, cloud accounts have gradually formed a sense of boundaries within the industry, 'not to slander each other'.

Cloud account is Yang Hui's third entrepreneurial venture. As early as 2014, he founded Tianjin's first P2P platform, Simple Wealth Management Network, which is a unique feature of this platform to raise funds for state-owned enterprise projects.

At that time, Yang Hui was only 27 years old and had just returned from studying in Canada. His first entrepreneurial project received a 50 million yuan Pre A round of financing led by "Tianchuang Capital" with a background in Tianjin State owned Assets Supervision and Finance Bureau.

In 2017, P2P platforms came to an end and he entered the SDK red envelope business. At that time, some of the clients who served requested to pay remuneration to the platform creators. In order to meet customer needs, they founded Yiyun Company in 2016, which is also the predecessor of cloud accounts.

Unexpectedly, this smoothly developed business showed strong potential, and in 2017, the team decided to devote themselves wholeheartedly to cloud accounts.

Previously, the issue of income distribution for new forms of employment was still in a vague zone. At that time, Didi drivers, Meituan riders, Zhihuda owners, B-station UP owners, and podcasts on the Himalayas all faced the problem of how to comply with accounting when extracting rewards from the platform.

Many entrepreneurs of the flexible work platform recalled to the reporter of Southern Weekly that when the management was not so strict in the past, they mainly bought invoices to offset their debts. As these internet platforms continue to grow, compliance has become a focus of attention.

If the "labor remuneration" is withheld and paid, the income of 1000 yuan will only reach 800 yuan.

Based on market practice experience, Cloud Account consulted multiple law firms and top tax experts, and summarized eight characteristics of this group that are different from traditional employees: self-employed, income is not fixed, there are clear production and operation costs, there is no labor or labor relationship, transaction completion is random, completed through internet platforms, actively seeking business opportunities, and carrying out ongoing business activities.

For example, a grassroots anchor decides to try live streaming, and the duration and location of the live broadcast are all determined by themselves. There is no factual labor relationship or labor relationship with the platform. Even if you buy live streaming equipment, invest time in live streaming, and purchase traffic, you may not necessarily earn income.

Yang Hui believes that the income obtained through business activities should be defined as operating income, rather than labor income or salary income.

Cloud account pioneered the "Gig economy service model", independently developed the online "labor dispatch" platform, and proposed a model called business general contracting and subcontracting.

From a legal perspective, the platform subcontracts the business of content creation to the cloud account, pays commissions to the cloud account, and the creators undertake business from the cloud account. The cloud account then settles with the creators.

The key to the success of this model lies in the support of regulatory authorities. At the beginning of entrepreneurship, we considered that there were some solutions in the market at that time, and even if we grew up, there wouldn't be too good results. Maybe we could only do it for two to three years. Do we want to enter a short-lived industry when starting a business

Yang Hui told the reporter of Southern Weekly that he wanted to communicate with the government in the direction of legal compliance at the beginning and put it on the table. The whole industry should not do anything that cannot be put on the table in laws and regulations that do not apply to new situations and promote modifications.

There seems to be no controversy about the methodology of compliance now. However, when we first started, our persistence was not mainstream at that time. Everyone has different understandings of compliance, and the implementation methods are also different. "Jin Xuesi, Director of Cloud Account Marketing, introduced that as an internet company," our business needs to comply with the overall national policies

An entrepreneur in the industry told the reporter of Southern Weekly that cloud account is recognized as the first enterprise to run through the whole model.

The cloud account office area has no single rooms in the open office, and the workstations for employees and executives are adjacent without partitions or walls. (Cloud account provided/image)

Explosive growth

2021525.29202297620222021100%Explosive growth

Jin Xuesi explained that there were approximately 26 months before, with a monthly increase of 1 million people. Over the past three years, the scale of flexible employment has maintained a relatively rapid growth.

In addition, it also benefits from the national governance of internet antitrust. "Previously, internet companies chose suppliers and often required them to choose between two. After antitrust governance, we were able to serve both the industry leader and the industry leader.

For a Linggong platform, risk control is the core competitiveness. A former executive of cloud account told the reporter of Southern Weekly that the risk control capability of cloud account is far ahead of its peers.

Nowadays, the risk control system of cloud accounts has established data interfaces with Tianjin Public Security Bureau, Human Resources and Social Security Bureau, and National Development and Reform Commission, introducing data on fugitives, suspected gambling, suspected pyramid schemes, social security, major tax violations, abnormal operations, administrative penalties, and dishonesty.

The ability to serve customers is also one of the advantages of cloud accounts. A cloud account employee told the reporter of Southern Weekly, "Cloud account will establish an enterprise group for each customer, and the customer's demand must be answered within 5 minutes. If the customer fails to deal with the problem within the timeout period, the alarm will be upgraded to the first level, and finally to the chairman Yang Hui."

If a customer encounters an inspection issue with the local tax department, "our tax and legal departments can directly fly over to provide services.

Cloud account is the only Linggong platform in the industry that has continuously obtained the qualification of commissioned collection in the same region for seven years. The common practice in the industry is to sign multiple "tax sources", with the east side not bright and the west side bright. Cloud accounts, which have only one tax source, are almost rare.

For the past seven years, cloud accounts have maintained close interaction with various government departments in Tianjin. Jin Xuesi said, "Almost all committees, bureaus, and universities in Tianjin have come to cloud accounts. We have 119 industry university research projects, most of which cooperate with Tianjin universities

We will constantly provide data, improve our services according to government requirements, implement our risk control, and so on. Cloud accounts, from small to large, have been seen throughout Tianjin and are fully aware of us.

Entering any floor of a cloud account, the first thing you see is a wall of honor.

First, Chairman Yang Hui's personal honorary certificate: "National exemplary individual for Poverty Alleviation", "National Moral Model Nomination Award", "exemplary individual for Contribution to Building a Well off Society in an All round Way", "China Youth May 4th Medal".

He is also a member of the CPPCC National Committee, a member of the Standing Committee of the All China Federation of Industry and Commerce, a member of the Standing Committee of the 14th CPPCC Tianjin Municipal Committee, a vice chairman of the Tianjin Federation of Industry and Commerce, a member of the Standing Committee of the Tianjin Municipal Committee of Civil Construction, and a member of the Standing Committee of the People's Congress of Binhai, Tianjin.

Yang Hui introduced that the issue of employment is of great concern. Without companies like cloud accounts, market entities would have concerns about compliance, thereby reducing their activity and leading to insufficient employment.

Cloud accounts have solved compliance issues for internet platforms, making market entities more active and attracting more entrepreneurs, thereby stimulating fuller employment opportunities.

"The more developed the economy is, the more people are engaged in fixed jobs. On the contrary, it is Underdevelopment, where more people get income through the Internet platform." Jin Xuesi said that the value of cloud accounts is also reflected in providing services to Underdevelopment.

The platform data shows that in economically developed cities such as Beijing, Shanghai and Guangzhou, the proportion of cloud account users is the smallest, but the proportion of Underdevelopment is surprising.

From the beginning of entrepreneurship, cloud accounts have been promoting legislation for new forms of employment. A research institute has been established within the cloud account, opening up a theoretical research section, with an annual investment of 10 million yuan for theoretical research. The cloud account has a large number of academic articles on its WeChat official account and official website, which also makes it a rare private enterprise that can directly participate in the formulation of industry standards.

In 2021, Cloud Account participated in the drafting of the first industry management measure in the field of sharing economy jointly issued by 8 committees and bureaus in Tianjin, the "Tianjin Comprehensive Service Platform Management Measures for Sharing Economy". Two years after the implementation of the measure, Cloud Account participated in the revision and proposed industry opinions. On March 1 of this year, the measure was renewed for two years.

As of April 2023, cloud account has participated in 4 international standards, 1 international standard report, 6 national standards and 1 industrial standard, and presided over the drafting of 9 local standards.

Yang Hui said that his ultimate goal is to promote legislation, such as the introduction of the Flexible Employment Promotion Law.

A private enterprise can participate in local legislation, and Yang Hui said that cloud accounts are an example of good business relations in Tianjin.

On November 12, 2019, at the "Haihe Nighttalk - Entrepreneurs' Symposium", he gave himself an example to say that cloud account innovation does not need to consider the issue of "dare not", only needs to verify whether it is right or not.

Is there no difference between cloud accounts and other industries?

A Tianjin official in charge of investment promotion told the reporter of Southern Weekly that the support for cloud accounts is almost unique.

Some district governments in Tianjin also tried to replicate the cloud account model between 2017 and 2018. "The cloud account got a special policy at a special time, and later people could not replicate this policy.".

In 2016, when it was time to encourage "mass entrepreneurship and innovation", the above-mentioned officials stated that in the face of cloud accounts that were just in their early stages, "the government was trying to do so, and later generations could no longer enjoy the relaxed policies of that time.

The above officials have conducted in-depth research on the model of cloud accounts. At that time, cloud accounts were strongly supported, and according to their contribution to local finance, it has strong competitiveness in the entire industry. "If cloud accounts are only for small profits, then other platforms do not make money at all.

However, an industry insider admitted that it is difficult to attribute the success of cloud accounts solely to policy support. Some local governments have provided more financial support for investment attraction than Tianjin has provided for cloud accounts.

A cloud account salesperson introduced the business model of the platform to the reporter of Southern Weekly. The monthly income was less than 30000 yuan, and the service fee of the cloud account was 6.2%; If it exceeds 30000 yuan, the cloud account charges a service fee of 6.5%.

Taking the withdrawal of 100000 yuan as an example, the cloud account issues a 6% VAT invoice for the customer. The final tax rate, including Surtax, is 6.7%, and the amount of VAT and Surtax to be paid is about 6700 yuan.

In accordance with the relevant provisions of the Announcement of the State Taxation Administration Tianjin Municipal Taxation Bureau (No. 30, 2018) on verified collection, 100000 yuan of income was withdrawn, and about 500 yuan of individual income tax was paid, regardless of the current half tax preference.

At a service rate of 6.5%, the customer paid 106500 yuan to the cloud account, but the cloud account had to pay at least 107200 yuan, resulting in a loss of 700 yuan and becoming a loss making transaction.

The salesperson stated that the platform will not lose money and the service fees charged can basically cover costs. There are a large number of users on the platform, with a monthly income of less than 30000 yuan. This part of the income is tax-free, and an additional 0.3% reduction in service fees based on 6.5% can still generate a profit of 0.2%.

The cloud account also has agency services. When the revenue on the Tiktok platform exceeds 300000 yuan, it is recommended to use the cloud account to establish individual businesses. The cloud account will register these users for industry and commerce, handle taxes on behalf of them, and charge a service fee of about 3000 yuan.

The person in charge of cloud accounts also stated that it is not convenient to disclose the platform's profits, but cloud accounts do not charge low fees in the industry. After calculation, the fees should be able to cover the platform's costs.

Several peer entrepreneurs told the reporter of Southern Weekly that the secret of the flexible employment platform to make money lies in "industrial financial support", and the amount and proportion of financial support signed by each enterprise and the government are core secrets of enterprises.

In terms of cloud accounts, the reporter from Southern Weekly said that industrial support policies are not only cloud accounts, but also flexible employment industries. They are widely used in various industries. Cloud accounts are no different from them.

According to a report from China News Agency, cloud accounts can enjoy relevant industrial policy support rewards in the studio's registered location, and a certain proportion of the customer's personal income tax payment amount will be refunded, with a refund ratio of 29%.

An insider told the reporter of Southern Weekly that the cloud account charges are near the ceiling. Some platforms issue 6% VAT invoices, but the service fee is only 5.5%. The local government will return the tax to the platform through various compliance methods. "The actual cost is only 3.5%, and it can also earn 2% profit".

A director of the tax bureau of Shaanxi Province explained to the reporter of Southern Weekly that "entrusted tax collection" is the key to the operation of the industry. "The tax bureau temporarily transferred the power of tax collection to enterprises within a certain range, which is equivalent to tax agency".

In his memory, in the past, entrusted tax collection was only applicable to some traditional industries, such as Farmers'market, freight companies, or telecommunications companies, post and telecommunications offices, insurance companies, etc., and entrusted relevant units and personnel to collect sporadic, scattered and non local taxes.

From the final result, cloud accounts have achieved a win-win situation for all three parties.

The internet platform has solved the issue of tax compliance and obtained value-added tax invoices that can offset costs. Employers on the platform have paid personal income tax on their business income and received more cash. Tianjin has also brought billions of local taxes by embracing this new form of employment.

However, on March 25, 2022, the three departments of the State Council jointly issued a document titled "Opinions on Further Regulating the Profit Making Behavior of Online Live Broadcasting to Promote the Healthy Development of the Industry", requiring "to effectively regulate the tax management of online live broadcasting platforms and related third-party enterprises entrusted to collect and issue invoices".

At the end of 2022, Tiktok changed the settlement method, and the annual withdrawal of more than 300000 yuan must be collected through audit through the company or studio settlement.

That is to say, if the anchor's annual withdrawal amount exceeds 300000 yuan, Tiktok and the special service provider will no longer bear the individual income tax withheld and remitted for him, and the trade union or individual studio will bear the tax liability itself.

Many broadcasters also received calls from cloud accounts at the end of the year, requesting them to submit the 2022 cost invoice and change the tax collection method from approved collection to audit collection.

For the future, Yang Hui has even greater aspirations. "Currently, the flexible employment population in the United States accounts for one-third. Due to the larger scale of China's employment population and the shift of low-end employment industries, the scale of flexible employment will be even larger. China should reach half, or even exceed half.

He believes that this day is approaching. "In 2018, we had a revenue of 10 billion, and this year we have a revenue of 100 billion. The industry's certainty is becoming stronger and stronger. As you will see, this matter can really promote employment, and it is not beyond our control. Some people are worried that the problem has not appeared on a large scale, and even if it does, it is within the scope of control that can be corrected.

Southern Weekly reporter Luo Huanhuan

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