Study Of E-commerce Taxation Law Issues

The rapid development of "E-Commerce" has resulted in developing many contemporary issues within the domestic and global communities. Among all the recently emerged concerns, one that is closely relevant to the future of E-Commerce and national revenues, is the delicate topic of E-Commerce taxation, The question is whether E-Commerce should be taxed as a conventional business and, if the answer is affirmative, how to tax on-line transactions, what transactions should be taxed, what tax rate to apply, and how these transactions will be captured or reported.With the advancement of the "Knowledge Economy", a great deal of focus on economic activities has moved from tangible assets to intangible assets. The merging of the E-Commerce and the Knowledge Economy has also made the tax issue more imperative than ever, especially in the digitized products and services areas. Consequently, the question of whether the conventional tax principles and tax basis can still apply to the E-Commerce and Knowledge Economy has drawn the attention of many national governments and international organizations.The increased influence of the Internet on business trade, including product and service sales, can create an erosion of the current tax revenue bases. Use of the internet sources to conduct commercial transaction is still in its infancy in China however a potential exists for a significant reduction on the current tax base may be seen in the near future, bringing numerous and difficult challenges to the tax administration and their existing tax laws. The Internet offers businesses opportunities to provide their products and services in a jurisdiction without having a local presence. Many of the existing tax regulations and jurisdiction are based on concepts such as company locations or actual physical residence. Reliance on these somewhat outdated tax models in an Internet environment may create unwanted loopholes or uncertainty on how to apply, report, and collect appropriate taxable revenue.What changes will be necessary to the conventional tax principles so they can be applied effectively going forward? This concern and challenge has become a common matter in both domestic and global affairs. For all participants in this Global E-Commerce environment, it is doubtful that no single country can determine all the answers, and most likely, the better solutions shall be developed through continued international efforts.This research will explore the impacts of e-Commerce on traditional taxation methodology and principles. In addition the rise of electronic commerce can potentially introduce pressures and influences that could upset the tax balance existing between importing and exporting states that could in fact also influence trade between cities, providences, and countries. Consequently we also need to examine the consumption tax treatment and imposition of customs duties of electronic commerce.