The Study Of Taxation On Cross-border Transaction Income Derived From E-business

With the rapid development of global E-business, cross border transactions have become more easily and frequently. Similar to traditional transactions, E-business involves the transfer of products and the sourcing of incomes among various countries, and various taxpayers. In this regard, each individual government should have rights of levying taxes on E-business as does the traditional transactions. However, due to the intrinsic features of E-business such as openness, crossing border and no boundary, the traditional taxation principle is facing tremendous impingement and not positive. Thus, under the prevailing circumstances, lacking of the relevant tax regulations results in loss of tax revenue. Plus, the computerization and de-paper increases the difficulty in tax collection and inspection. From this point of view, E-business represents a challenge to and erects an adverse impact on the traditional taxation theories and practice. Such problem become further sharp particularly under the cross-border transactions where different countries are to be affected. As the suggestion from the developed countries, like USA, many country give tax free treatment for the E-Business. While this thesis aims to identify the difficulties in tax on E-business on the side of most of developing countries, analyzing the existing tax rules and regulations of China and therefore provide the suggestions for future development of the relevant tax rules in China. The discussion and conclusion are set out from a pre-set case and based upon traditional taxation theories and the existing practices in other countries, which covers the business models, the classification of transactions, and how to define the concept of turnover, profits, services and royalties under E-commerce. In the last section, by reviewing the current development of E-business in China and based on the previous analysis, the thesis tries to make conclusions by providing some suggestions for development of the E-business tax rules and regulations in our country.