Explore E-commerce Taxation

Electronic commerce(EC)is a new enterprise management model which was risen in USA and Canada in the early 1990's. In other words, it means the two sides of trade do business of goods or service on the internet. Recently imposing a tax on EC becomes a problem of many countries, and different countries take different attitudes towards the problem. On consideration of economic development and situation, various countries take various tax policies, as the collection and management of taxation play a role in country's dominion. In a word, the attitudes can be distinguished into two groups: developed countries and undeveloped countries. A point of view: the developed countries insist that the EC should not be imposed tax on, due to the tax institution of income tax focused. EC makes little the drain of taxation. Contrary, EC help to push the sale of electronic product to other countries. The spokesman of this point of view is USA. The American Electronic Advisory Committee strongly oppose to the imposing tax on network's sale. They not only request the Congress to postpone the prescription Postpone internet taxation for another five years, but also try hard to seek for Permanent freedom from taxation. In their minds, there is the rudimental form of EC, lack of solid foundation. The number of EC sales looks very huge, but in real it only makes 1% of sales number in the retail trade. Until 2004, the percentage was just above 2%. If they imposed the tax on EC now, the internet sales will fall down 4%. And these internet corporations offer many jobs which can develop the economy in related field. The government took more taxation through the existed channels for taxation, and it could be more responsive to simple taxation of Internet. The other side: undeveloped countries insist of taxation on EC, due to the tax institution of tax on turnover. As the pure consumer of electronic goods, the development of EC can make the drain of Sales tax. In their view, the internet sale as other channel sale should be free of tax on turnover. Otherwise there is an unequal competition between traditional businesses and internet business. Tax on turnover as the chief staple of the local government's income is the social service's financial base. If the government can not get the financial revenue, the public will get loss at last. And the rapid development of EC makes new weakness of taxation, and it also become the gate to riches of many people to evade tax legally. The government should make policy to tighten collection and management, and plug up loopholes of taxation in EC. In recent years, electronic means and business form organize together and swift development. It becomes one of the New Economy marks, as playing an impotent role in the motion of the national economy. At the same time, EC challenges tax work to new fight. EC can be divided into two groups: indirect EC and direct EC. Indirect EC means that some people consult about the tread in the network and pay the tread outside the network. Indirect EC is no different from the traditional commerce. It makes no appreciable influence to the tax institution. But direct EC means that some people consult about the tread and pay the tread in the network. Direct EC makes an extensive attack to the tax institution and the tax policy. Now in the total of claims presented of the world EC, proportion of direct volume of business is only 5%, but proportion of indirect volume of business is 95%. The contradiction is no conspicuous and the effect is small. But as the development of EC and the social progress, proportion of direct volume of business will be improved greatly, while digital form product will occupy an important place in the EC. At that time, it will take an appeal for the reform about the tax institution, the tax policy, the international adjustment of tax interest, tax collection and management and a system of tax laws. On the other hand,it also takes an opportunity of perfection and invention of the tax institution. Therefore, it is necessary that doing study how to found a...