A Study On The Tax Collection And Management Of E - Commerce In China

With the rapid development of Internet technology, the e-commerce, characteristic of the Internet-based commercial and trading activities, has been making the unprecedented rapid development. Along with the explosive growth of the transaction volumes and the number of users, the tax loss in the e-commerce area in China has turned out to be a focus of extensive concerns. Some companies, for instance, have even caused considerable tax losses to the country by way of concealing income and issuing false invoices by taking advantage of the e-commerce operations, which may run in a paperless and covert manner. In June 2011, Wuhan Municipal Office, SAT issued a tax penalty, the first one ever issued in China, to a online store called “100f1”, which has triggered extensive concern from all walks of life on whether or not tax should be levied on, and what kind of tax should be levied on, the online store operations. On the one hand, there is information asymmetry between taxpayers and tax collectors, the taxpayers are poorly aware of their obligation to pay tax and there’s lack of the sophisticated means of tax collection and administration. On the other hand, online stores can be opened without registration at the local industrial and commercial administrative authorities and online stores may not even have a concrete residence address, with the electronic business data and payment records rendering it difficult to keep tracking and to identify the real taxpayers and tax payment places. All these factors challenge the existing laws and regulations, while prominently projecting the tax-related issues in e-commerce. Therefore, this paper considers it is of great urgency to study and resolve the tax-related issues in e-commerce, set up the conception of information-based tax administration, formulate and improve the tax laws and regulations relating to e-commerce, with such tax elements as taxpayer and tax payment place to be clarified. Meanwhile, supporting tax collection and administration system should be established and the inter-department data exchange be strengthened on the basis of the registration system of network platform providers, so as to build the e-commerce tax collection and administration system in China, seal up the loopholes and prevent further tax losses. Such initiatives have remarkable theoretical and practical significance to the promotion of healthy development of e-commerce and maintenance of tax equity in China.On the basis of summarizations with regard to the e-commerce development status, tax features, tax collection and administration status and the e-commerce tax administration theories and practices as available both at home and abroad, and by integrating the analysis of the current status of e-commerce tax collection and administration in China and by applying the analytical method that integrates quantitative and qualitative approaches, the paper reveals the causes of insufficient e-commerce tax collection and administration in China and proposes an overall mentality with regard to the e-commerce tax collection and administration in China as follows: institution-wise, it is proposed that e-commerce tax laws and regulations be promulgated and improved as soon as possible with such tax elements as taxpayer and tax payment place to be clarified; operation-wise, it is proposed that the tax authorities adhere to the concept of “information-based tax administration” and strengthen the strategic cooperation with e-commerce platform providers and set up tax source registration system, tax withholding system and data exchange system, so as to monitor tax sources effectively and eliminate the loopholes in tax collection and administration. The main contents of this paper are shown as follows:1. By expounding on the e-commerce development status both at home and abroad as well as the derived tax-related issues, the paper discusses the tax-related features of e-commerce and their impacts on the current tax system.2. The paper delivers a statement about the theories and literature relating to e-commerce tax issues as well as descriptions about the research results on such issues both at home and abroad, from which the conclusions are drawn for reference. Meanwhile, based on the current status of the tax collection and administration in China, the paper discloses the difficulties in the e-commerce tax collection and administration in China and sets up the research target.3. By exploring the various links throughout the tax collection and administration, reveal the loopholes in the links of tax registration, declaration, collection and follow-up management of e-commerce tax collection and administration in China, with the existing problems analyzed in an attempt to find out the causes of those problems by tracking them up. By analyzing the cases of tax inspections, the paper further verifies the existing tax-related issues in the e-commerce companies as well as the blind points in the e-commerce tax collection and administration under the existing tax law system.4.The paper proposes an overall mentality to perfect the tax collection and administration in China and the establishment of an e-commerce tax collection and administration pattern in China. Institution-wise, it is proposed that e-commerce tax laws and regulations be promulgated and improved as soon as possible with such tax elements as taxpayer and tax payment place to be clarified; operation-wise, it is proposed that the tax authorities adhere to the concept of “information-based tax administration” and strengthen the strategic cooperation with e-commerce platform providers, promote the comprehensive use of electronic invoices and set up tax source registration system, tax withholding system and data exchange system, so as to monitor tax sources effectively and eliminate the loopholes in tax collection and administration.5.Review and summarize the whole paper and sum up the innovations in the paper, with what’s to be studied next pointed out.