Research On E-Commerce Tax Administration System

Along with the vigorous development of the e-commerce, related tax issues have attracted more and more attention. In July2011, the Wuhan State Taxation Bureau levied RMB4.3079million tax from the online shop "my1%", making e-commerce taxation once again hot discussed. To tax or not to tax on E-commerce? How to tax? Such questions cause great concern of theoretical circles and Internet traders. On one hand, persistent old problems in traditional business tax administration are overall inherited by E-commerce, such as information asymmetry, tax un-compliance, low efficiency&high cost, and weak taxation inspection forces; on the other hand, with the proportion of small trading, offsite trading and intangible products trading in E-commerce increasing day by day, tax source monitoring and the realization of tax jurisdiction right are facing more and more difficulties, bringing tax administration on e-commerce more serious challenge. For promoting the development of e-commerce and safeguarding the State taxation interest, it has great theoretical and practical significance to study new characteristics, new problems and new ways of tax administration under the background of E-commerce, and establish tax administration system which both meets the demands of E-commerce management and is able to solve problems left from traditional business.The thesis which based on the generalization and summary of large amounts of literatures on E-commerce features involving taxation, traditional tax administration theories and existing E-commerce taxation solutions&countermeasures, combining with the analysis on China’s E-commerce tax collection and management status, using qualitative and quantitative analysis method, finds causes of insufficient force of current E-commerce taxation. It has built an overall model of E-commerce tax collection and management system, and studied a series of core issues including electronic comparison of invoices, E-invoice, Electronic fund flow monitoring and E-commerce tax jurisdiction assignment. It contains the following contents:1. E-commerce features involving taxation are summarized;5challenges and1opportunity of E-commerce on tax administration is generalized. Misunderstandings on E-commerce taxation are clarified:Taxation problems in E-commerce proposed by existing literatures cannot be only attributed to E-commerce itself, they should be divided into3classes including inherited issues, enlarged issues and specific issues. Traditional tax compliance research and theories of tax jurisdiction are reviewed and assessed. Varies of E-commerce taxation solutions&countermeasures are introduced and evaluated.2. Starting from the analysis of tax collection and management processes, the tax administration evaluation index system and evaluation model is established. Using combination of qualitative and quantitative methods, a comprehensive evaluation of current E-commerce tax administration ability is conducted. It finds that the general perfect degree of E-commerce taxation is only43.93%. Application of improved Fishbone diagram to analyze the weaknesses finds18causes on capacity lack in E-commerce tax administration. After calculating the effect of different causes on tax administration insufficient force, it finds inherited causes (such as "information degree low") have the highest effect of50.41%, proving old problems from traditional business are still the most serious threat to E-commerce tax administration; policy causes (such as "lack of cooperation with E-commerce platform ") list2nd (up to28.53%), illustrating near30%of E-commerce tax administration force loss can be restored through changing concept, clarifying thought, and changing collection and management policy; E-commerce features (such as "non-store operation") influence ranking3rd over17.68%; Zoom problem (such as "for personal sales, off-site sales supervision") affect the ranking of the lay, just3.39%.3. A general model of E-commerce tax administration system is built under systematic, scientific and information ideology. The system elements in the model are classified into functional elements and supporting elements; functional elements are made up of8link elements and10promotion elements. Function of the system, place of elements and interactions between elements are defined. System realization stage is divided into3of foundation, science and smart layers.4core functions are determined to be focused in this article, i.e. electronic comparison of invoices, electronic invoice, electronic fund flow monitoring and E-commerce tax jurisdiction assignment.4. The most important means of tax source monitoring--"taxation through invoices" is strengthened by means of information measures.Through the analysis of "taxation through invoices" management process, the article explains the principle of "taxation through invoices". It proposes the greatest threat of "taxation through invoices" is three noncompliance which is non-invoice sale, false invoicing, same number different amount invoices. It also analyzes and evaluates the resistance of three kinds of invoicing to these noncompliance, which are traditional manual invoicing, print invoicing, electronic invoicing. The conclusion is:traditional manual invoicing has nearly no resistance, print invoicing is a little better, the electronic is comprehensive good. Then, it summarizes the principles of tax restriction chain with three forms of tax type restriction chain, voucher restriction chain and corporate internal control restriction chain.According to the voucher restriction chain in the tax restriction chain principle, Electronic comparison mechanism of invoices is proposed which can be used in ordinary invoices by small scale taxpayers. The article analyzes the "electronic comparison of invoices" principle, proposes three distinguishing rules of how to find the invoice does not match the information. It also designs the scheme of "electronic comparison of invoices", provides three options to achieve the buyer’s expense voucher entry for consideration of the taxpayers’compliance costs.Two kinds of E-invoice solutions are supposed respectively serving E-commerce systems which embedded or not embedded tax invoice features. The express service of non-embedded invoice is recommended. The information anti-counterfeiting mechanism and inspection method of Invoice is designed.5. The method of using electronic fund flow monitoring to enhance tax source control is explored.A thought of fund flow monitoring is produced to compensate for the weaknesses of "taxation through invoices" system. In the electronic fund flow monitoring model, shared information according to the degree of privacy of information and sharing requirements is divided into three levels. Regular of store location and access mechanism is provided to internal data, low frequency across-systems shared data and high frequency cross-system shared data respectively. Classification register and query system of account transaction is designed to achieve efficient monitoring of fund flows. Right management mechanisms within statutory monitoring authorities, privacy and trade secret protection mechanisms are projected, to achieve harmony of fund flow monitoring, personal privacy and business secret protection.The automatic tax record and collection mechanism is designed for E-commerce transaction or payment platform. Firstly, it compares the tax sources finding methods in traditional and electronic commerce, proves E-commerce taxpayers must be found via E-commerce platform. Then, it designs the automatic tax record and collection mechanism for E-commerce transaction or payment platform.6. The paper also conducts a study on E-commerce tax jurisdiction assignment mechanism and realization principle. It has demonstrated necessity of innovation on E-commerce tax jurisdiction system by "double islands model"; proposed the standard and inferring methods on proceeds sources; gave countermeasures on tax sources erosion caused by standing institution’s disappearance; and showed the measure as well as order of using three different tax controlling methods including "controlling people","controlling material", and "controlling money".The innovation of this thesis contains:1. It has presented a tax administration evaluation index system and evaluation model based on the process of tax collection and management, and found weakness in current E-commerce tax administration and the causes of weakness.2. It has built a general model of e-commerce tax administration system, established a blueprint for innovating and upgrading traditional tax administration system by means of E-business.3. It has proposed the principle and solutions of4core funcrions of the e-commerce tax administration system, which are Electronic Comparison of Invoices, E-invoice, Electronic Funds Flow Monitoring, and E-commerce Tax Jurisdiction Assignment and Implementation.