Legislation On Indirect Taxation Of E-Commerce In China

1 China

Our country

The promulgation of the above laws, regulations and regulations has promoted the healthy development of e-commerce in China. However, the system is in disorder. There are still many blank areas in the legislation of e-commerce.

2 legal issues related to indirect taxation of e-commerce in China

2.1 value-added tax and business tax arising from indirect taxation of e-commerce in China

(1) the issue of value added tax.

The current legal system of value-added tax in China is mainly composed of the Provisional Regulations on value-added tax (promulgated in December 13, 1993) and the detailed rules for the implementation of the Provisional Regulations on value-added tax (promulgated in December 25, 1993).

It is mainly applicable to the sale of goods or the provision of taxable services and the import of goods in China, including the import of foreign goods.

According to China's value-added tax law, goods refer to tangible movable property, including electricity, heat and gas.

Taxable services refer to processing, repairing and repairing services.

The sale of goods in our country means the place where the goods are sold or where they are located, and the sale of taxable services refers to the sales of taxable services within the territory.

[1] (P79) individuals or units outside the territory sell taxable services in the territory while there are no operating agencies in the territory. The taxable payment shall be paid by the agent as the withholding agent, and without the agent, the purchaser shall be the withholding agent.

From the perspective of legal provisions, because the adjustment range of China's value-added tax law applies only to several specific services, China's current value-added tax law can not be applied to e-commerce.

(2) business tax.

China's specific legal provisions on business tax include the Provisional Regulations on business tax (promulgated in December 13, 1993) and the detailed rules and regulations of business tax (promulgated in December 25, 1993), and the business tax and value-added tax are parallel taxes.

According to the first provision of the Provisional Regulations on business tax, business tax applies to general service consumption, including pportation, construction, finance and insurance, post and telecommunications, cultural and sports, entertainment and service industries.

Due to the development of electronic technology, [2] (P20) has made some services trade directly and directly, so the business tax is facing the pressure of reform.

{page_break}

2.2 standing bodies

The "standing body" is a very important concept in the field of international taxation. It was put forward in the draft model OECD in 1963.

A permanent establishment refers to a fixed place of business operating in whole or in part within a country, including management sites, branches, offices, factories, etc.

[3] (P85)

According to the current tax legal system of our country, the premise of judging whether the tax should be taxed is that the operator must have a permanent institution in the country and obtain the income belonging to the permanent institution, so that the government shall exercise the tax jurisdiction of the government in the exercise of regional tax.

The emergence of e-commerce has severely restricted the applicability of the traditional concept of permanent establishment.

Because e-commerce activities are based on the virtual market, there are no so-called "places", "bases" or personnel in the operation of the Internet. A large number of consumers and manufacturers buy foreign goods and services on the Internet. Foreign sellers do not appear in their country, so they can not levy taxes on the sale and operation of foreign sellers in their country.

In the academic circles, the abolition or abolishment of the principles of permanent institutions mainly includes abolition, reservations and reservations, but makes appropriate changes to adapt to e-commerce.

[4] (P23) the author thinks that the third viewpoints are more desirable in theory and practice.

Theoretically speaking, the principle of permanent organization is to balance the financial leverage of the country of residence and the source country, and it can not be fundamentally abolished.

In practice, the Internet tax Freedom Act of the United States, Canada's e-commerce and Canadian tax administration all agree that there is only a difference in the way of activities between e-commerce activities and traditional business activities. Therefore, the existing principles of international tax law, including the principles of permanent institutions, are also applicable to e-commerce.

2.3 tax collection and management

With the rapid development of e-commerce, e-commerce has become the main means of commodity trade. At the same time, the special paction mode has brought great challenges to the traditional tax law system and tax management mode.

(1) tax jurisdiction is hard to confirm.

At present, our tax jurisdiction is based on the principle of "person and territory", that is, the legal person organization in China and the foreign enterprises that come from the territory of our country have the duty to pay taxes in our country.

[5] (P28) is the premise of tax collection and administration under the jurisdiction of personal and territorial jurisdiction.

However, in e-commerce pactions, the location of e-commerce is difficult to determine. The buyer, bank, server, network service provider and seller body involved in paction activities may be in different geographical areas, and apply different regions' tax collection and management policies.

Taxpayers can arbitrarily choose where to pay taxes, pay less taxes or pay no taxes.

After the implementation of the electronic signature law, the identity of the two sides of the e-commerce paction has been confirmed, but it is still hard to confirm the place where the tax payment is committed, and the intensification of electronic pactions will aggravate this phenomenon.

(2) the taxpayer is not easy to identify.

In the practice of tax collection and management, because of the different industry and economic nature of the tax payer (enterprise legal person or individual), the same tax object often applies different taxes, and even applies different tax bases and tax rates in the same tax category.

If the pfer proceeds, if it is an enterprise, it is necessary to levy corporate income tax. If it is an individual, it needs to levy personal income tax. In the traditional pfer process, the tax payer is well defined, but if such behavior is carried out online, it is difficult for the tax department to determine its main character, so it is impossible to implement effective collection and management.

(3) the means of tax collection and management need to be improved.

In the current practice of tax collection and management, enterprises need to submit a large number of legally binding evidential materials. After the implementation of the electronic signature law, the emergence of electronic documents with the same legal effect has created new problems for tax authorities and taxpayers in the recognition and use of electronic signature data.

3 the perfection of indirect taxation law system of e-commerce in China

3.1 modification of China's value-added tax regulations and business tax regulations.

Under the current circulation tax system, how to make qualitative data of online pactions should be determined according to the actual situation of our tax system.

We should not only pay attention to the principle of tax neutrality and fairness, but also consider the benefits and technical feasibility of taxation. We should not only start from the reality of domestic tax system, but also see the trend of international coordination of e-commerce taxation.

There is no essential difference between e-commerce and traditional trade. Therefore, indirect tax collection should be based on the current tax system, and the necessary amendments, supplements and improvements should be made to the current tax system in light of the characteristics of e-commerce, rather than the introduction of new taxes.