A Study On Legal Issues Of Taxation Of Electronic Commerce

E-commerce is one of the most popular applications of Internet. It brings challenges to the present legal system on taxation owing to the great contrast with the traditional trading mode. This paper probe into the impact, analyzes the law and policy on the international level, then puts forward legal suggestion under the new e-commerce context.This paper is divided into 3 chapters:Chapter 1: a general introduction on e-commerce and the impact it brings to taxation. First is the concept, category and characteristic of e-commerce. E-commerce can be divided into 4 categories based on the trading subject: business to business, business to consumer, consumer to consumer and business to government e-commerce. Based on trading target, it can be categorized as tangible and intangible e-commerce, of which the latter is more challenging. E-commerce usually has a concealed trading subject, an intangible trading object, an international trading scope and a high efficiency, etc. These characteristics are closely related with the impact which mainly manifests itself on legal principle, elements, jurisdiction and taxation collection and management.Chapter 2: law and policy on e-commerce in other countries and international organizations. America makes the quickest response to e-commerce taxation, issuing a series of documents such as《Selected Tax Policy implication of Global Electronic Commerce》,《A Framework for Global Electronic Commerce》,《Internet Tax Freedom Act》, implementing the neutral principle of taxation and not levying tax on e-commerce. European Union exercises substantial measures to levy value-added tax, and meanwhile emphasizes the justifiable tax without impairing the development of e-commerce. United Nation suggests a"bit tax"to reduce the difference between rich and poor. OECD follows the principle of medium taxation, adhering to levy tax in the initiation place of e-commerce. Generally the developing countries are more cautious to the tax immunity of e-commerce.Chapter 3: suggestions on e-commerce taxation in China context. The first section sets up the basic principle in China. This author is of opinion that, when drafting e-commerce taxation law, the principles of neutrality, equality, efficiency and sovereignty should be followed. The second section is on taxation system reform. In order to set up a perfect e-commerce legal system, we should aim at improving rather than negating the present taxation legal system. The third section is about how to improve the legal system on e-commerce taxation. This author suggests modifying and adjusting the existing legal mechanism on taxation management, collection, supervision, etc which are fitting for the e-commerce characteristics, so as to perform effective regulation on e-commerce. The last section suggests strengthening the administration of international e-commerce tax collection. We should, on one hand, base the measures on the sovereignty principle, exercise jurisdiction over citizenship and territory properly under the legislation on e-commerce taxation, on the other hand, make effort to promote the facilitation and cooperation. This author also suggests the standing body approach still be applicable in e-commerce, however, some new contents should be put thereinto.