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Influence Of Electronic Commerce On Legislation Of Transfer Pricing And Relevant Countermeasures

Posted on:2008-12-09Degree:MasterType:Thesis
Country:ChinaCandidate:J RenFull Text:PDF
GTID:2166360215463169Subject:International Law
Abstract/Summary:PDF Full Text Request
E-commerce has been developing rapidly and becomes a new economic engine since 1990s. According to a report published by the United Nations, the amount of e-commerce transaction would reach 1 trillion USD in 2010 and one-third of the international trade would be done through internet in the next 10 years. E-commerce has a great potential market and unpredictable business opportunities and contains remarkable profits. The development and broad use of e-commerce has also brought great challenges to current legal system including tax law. As e-commerce is intangible, transnational and rapid, the taxation agencies of all nations may face difficulties in monitoring it. The way of tax avoidance has also changed under e-commerce. As the most common method of tax avoidance, transfer pricing becomes more transnational, intangible and rapid than before, which makes it more difficult for taxation agencies to monitor it. The transfer pricing methods, the core of the legislation of transfer pricing, are facing difficulties in application under e-commerce, which cause serious negative effects on national taxation and market competition.This article is trying to analyze and discuss the following problems: 1. to what extent e-commerce has influenced the legislation of transfer pricing and whether e-commerce has destroyed the basis of the legislation of transfer pricing; 2. the countermeasures taken by relevant countries and international organizations to face the challenges and feasible future plans; 3. the countermeasures PRC should undertake.The article is divided into 6 parts, about 45,000 words. Part 1, Introduction, generally presents the scope and the purpose of the study. Chapter I beginning from the definition and characteristics of e-commerce analyzes the negative effects of e-commerce on international tax avoidance, the changes to two major characters of transfer pricing (associated enterprise and transfer pricing) brought by e-commerce and the main methods of transfer pricing under e-commerce and its harm. Though e-commerce would not brought fundamental changes to the nature of transfer pricing, it makes the construction of multinational associated enterprise group more easy and makes the internal relationship among the group members more close, which makes the monitoring of taxation agencies more difficult and do harm to the national taxation and market competition.Chapter II makes detailed analysis on the influence of e-commerce on the transfer pricing methods, the subject and object and the core principle of the legislation of transfer pricing, which covers the main part of the legislation of transfer pricing. Though e-commerce has brought severe impacts on the legislation of transfer pricing and gradually made some of it valueless, the current legislation is not absolutely useless. Some minor methods in traditional transactions, such as Profit Split Method, are more and more important under e-commerce and become the fulcra of the legislation of transfer pricing, but in order to conquer the challenges effectively, it is still essential to make new policies.Chapter III talks about the current policies made by some developed countries and international organizations and their characteristics. The thought of regulating the transfer pricing under e-commerce through a multilateral tax treaty system is also presented in this chapter.The legislation of e-commerce and transfer pricing is far from perfect in our country and our country might stand an even worse position when facing the impacts e-commerce has brought to transfer pricing. Chapter IV analyzes the current status of the legislation of e-commerce and transfer pricing in our country and points out the setbacks. After that, some suggestions are given out for our country to face the influence of e-commerce on the legislation of transfer pricing.The Concluding Remarks is the last part of this article. It makes the conclusion of the whole article and put forward the prospects of the legislation of transfer pricing.
Keywords/Search Tags:E-Commerce, Transfer Pricing, Associated Enterprise, Arm's Length Transaction, Transfer Pricing Methods
PDF Full Text Request
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