Research On Improving Tax System For China’s Cross-border Direct E-commerce

Cross-border direct e-commerce refers to the kind of cross-border e-commerce of which all transactions of goods and services are conducted online. As a new trade mode, it has grasped markets both at home and abroad with advantages such as being multilateral, direct and digital as well as having small batches and high frequency. At present, developed countries and some developing countries are actively conducting research on the legislation of taxation on cross-border direct e-commerce. Since cross-border direct e-commerce involves the allocation of tax benefits among countries, it has become a difficulty for improving the tax system for China’s cross-border direct e-commerce with regard to finding balance in protecting interests of each country. By studying the income tax and turnover tax of cross-border direct e-commerce, this paper tries to put forward a reasonable and feasible improvement program within the framework of China’s current tax system.In terms of the arrangement of contents, firstly, this paper gives a brief introduction on basic tax issues related to cross-border direct e-commerce to define relevant elements and tax theories for it. Secondly, it points out the existing problems from three aspects in combination with the actual situation of tax system for China’s cross-border direct e-commerce such as, identification of properties of tax objects, identification of tax jurisdictions and plight for tax collection system. From each aspect, this paper elaborates on two categories of tax, that is, income tax and turnover tax. And then it conducts a comparative analysis of overseas cross-border e-commerce taxation systems, mainly analyzing related systems of the United States, the European Union and some developing countries and reasons of formation. Lastly, it strives to address the difficulty of identifying properties of tax objects and that of identifying tax jurisdictions from perspectives of two main categories of tax related to cross-border direct e-commerce, and puts forward a tax collection system of combining withholding by a third party and reverse taxation for cross-border direct e-commerce.