Research On Transnational Electronic Commerce Tax Revenue Jurisdiction

Electronic commerce is one of the most rapid developed business models sincethe20th century. The transnational E-commerce in our country in recent decades israpid developed, the rapid rise of the various types of electronic business, makee-commerce war intensified. The development of this business model is closely relatedto rapid scientific and technological level, and the Internet is the main force to promotethe development of the business model. This business model which is attached to theInternet technology reflected the different characteristics from the traditional businessmodel in its gradual development. These features determine the generation ofelectronic commerce, and will give the traditional commercial model relatedmanagement system some impacts, specially the country’s main economic sovereignty,namely tax jurisdiction is the first to be affected. The transnational e-commercetransactions on the Internet, has the characteistics of extensiveness of the tradingsubjects, fuzziness of the trading sources, convenience of the trading process and theinstantaneity of the trading results. The transnational electronic commerce with thosecharacteristics although can make deal completed very fast even the trading partners indifferent countries, it also cause tax jurisdiction difficulties between two countries likeintensifying the trend of double taxation and emerging new ways of international taxavoidance.This passage is based on the two major types of taxes in the world, income tax andturnover tax, respectively analyzes the transnational e-commerce impacts on their taxrevenue jurisdiction, after introducing how to exercise traditional tax revenuejurisdiction. In terms of income tax, transnational e-commerce activities affect both itsresident jurisdiction and source jurisdiction. For the former, mainly is difficult todetermine the resident status for the legal person. For the latter, including has impactson the principle of permanent establishment which is the applicable principles of joinpoints，and makes the division of income properties become blurred. In terms ofturnover tax, since the virtualization of trading process, it’s not only hard for taxauthorities to determine taxpayer and tax payment place but also difficult to distinguishthe properties of tax object, these problems definitely will have effects on the turnovertax jurisdition of a country. For the difficulty exercise of tax revenue jurisdition causedby the e-commerce, the parties have different solutions. From the sngle of domestic law, the most repersentative is the United States, and from the angle of international law, twointernational orgnizations, the OECD and the UN provide a good example on the doubletaxation and tax avoidance. These solutions are out of their own economic positionsalthough they are designed to solve the problem of tax revenue jurisdiction. Therefore,China should treat this issue of national economic sovereignty with caution. In addition,we should establish some basic tax guiding principle to adapt the impact of the taxjurisdiction by e-commerce. This passage also made some thinking on income tax andturnover tax which is affected by the e-commerce, and the main point is to perfect theexercising of their tax jurisdiction. At last, we should clear that all countries in the worldcan exercise tax jurisdiction reasonably as long as they process widely tax cooperation.