Research On Customs Valuation Of Cross-border Digital Products In The Internet Environment

Digital products mainly refers to products or services like data,software,audio-visual products,electronic books,etc.,which can be digitized and transmitted over the Internet.Traditionally,such products have a physical carrier,and are classified in the category of goods,which shall be subject to customs duties.However,in the Internet environment,it is difficult to conduct customs valuation and taxation on such products,for the cross-border digital products are transmitted through electronic network.In 1996,the WTO Ministerial Conference in Singapore focused on the issues related to digital products for the first time.However,the special nature of digital products leads to classification problem for such products,namely classified as trade in goods and services,or intellectual property trade.Proceeding to the next step,the problem leads to the dispute on its applicable trade rules-GATT,GATS or TRIPS.On customs valuation of such products,it is also difficult to solve this problem due to the WTO Customs Valuation Agreement's requirement that the goods to be valued must be tangible.Moreover,because WTO members stand for their own interests,it is difficult to reach a consensus under the WTO framework and the related issues have been being unsettled.The legal status of WTO Dutyfree Moratorium on Electronic Transmissions,adopted in WTO Ministerial Conference in Geneva in 1998,has been still in an indeterminate state,and the practice of duty-free treatment on digital products has been maintained so far.At the same time,the influence of the digital economy worldwide on the world economic order has drawn the attention of the international community,such as free trade agreements(FTA)among many countries and Trans-Pacific Partnership Agreement(TPP)which has the terms related to digital products trade and E-commerce.Base Erosion and Profit Shifting(BEPS)promoted by G20/OECD also takes how to address the taxation challenges of the digital economy into the action plan.Many nations also adjust their national tax system to meet this trend.In this context,it highlights the necessity and urgency to solve the customs valuation issues of the cross-border digital products in Internet environment.As the Internet economy and digital trade continues to expand,the problem of tariff loss is also growing.With countries climbing the upstream of IT global value chain,the issues related to customs duties and consumption tax upon crossborder digital products started the competition between developed countries and developing countries in the field of information technology.Meanwhile,under the background of Chinese economy's "new normal" and the supply-side reform,the research on customs valuation of cross-border digital products is of great significance.The main contents include: historical background,current situation,and the focus of customs valuation and taxation of cross-border digital products under WTO framework for dealing with the dispute;difficulties in addressing crossborder customs valuation and taxation of digital products within existing customs regulations under the WTO framework-classify problems;legal limitations of Agreement on Customs Valuation of WTO to resolve valuation problems of crossborder digital products;the taxation of digital product in major countries and regions and other international reforms on digital product-related issues;the necessity of tariff on cross-border digital products;policy recommendations on issues we have studied.The main contribution of this paper is to analyze the core issues of customs valuation and taxation on cross-border digital products in the Internet environment under the WTO framework.Namely,the paper clarifies the classification of digital products,provides the legal basis for customs valuation and taxation on such products,and presents the relevant policy recommendations.