The Legal Issues Of International Taxation On E-commerce And Its Related Opinion And Law

Electronic commerce may represent the most radical force of change that the world has encountered since the Industrial Revolution. Its rapid development has derived many unconventional legal issues. Among all the newly emerged issues, one that closely relevant to the future of the E-commerce and national revenues is the thorny issue of E-commerce taxation,, Consequently, whether the conventional tax principles and tax basis can still apply to the E-commerce and Knowledge Economy has also attracted the attention of national governments and international organizations.The e-commerce has significantly impacted the conventional taxation principals. The Internet offers businesses opportunities to provide their products and services in a jurisdiction without having physical presence. As the taxing jurisdiction is based on concepts such as residency, source and permanent establishment that have an important element of physical or territorial nexus with a tax jurisdiction, the reliance on these concepts in an Internet environment may create uncertainty and ambiguity for electronic commerce and tax administration. Also, intense application of Internet upon business trade becomes eroding tax revenue bases.How the conventional tax principles can apply in the future and howto effectively maintain the fairness of taxation, therefore, has become a common issue for all participants in this E-commerce world. It is obviously that no single country can determine the outcome of such question. The best solution shall be through international efforts.This research explores the impacts of electronic commerce on traditional taxation principles, taxing jurisdiction, tax levying and administrative and permanent establishment, as well as discusses whether E-commerce should be taxed as the conventional business and, if the answer is affirmative, how to tax the on-line transactions. The variable opinions regarding these issues are reviewed.Use of the internet sources to conduct commercial transaction is still in its infancy in China, however a noticeable increasing will be seen in the near future and drive many challenges to tax administration. China need take action to deal with the issues. What China should do to handle the relationship with other countries related to e-commerce taxation is examined.