Research Of The Value-added Tax Jurisdiction On Cross-border Transaction Of Digital Products

With the development of Information and Communication Technology(ICT),the digital economy has risen rapidly in recent years,resulting in emerging business models represented by app stores,online advertising,mobile payments,etc.There is also great potential in accepting and consuming digital economy-related goods and services.However,the existing tax system in various countries are based on the era of tangible economy.Digital economy subverts traditional trading patterns due to its digital and virtual characteristics,and presents new challenges to the substantive basis for taxation on traditional transaction.Economic development and expansion will pose a comprehensive challenge to the traditional taxation system.This challenge exists not only in the direct tax system but also in the indirect tax system represented by Value Added Tax.Under the background of “business reforms and increasing revenues”,studies on the new challenges faced by the value-added tax system are of great significance to the improvement of the value-added tax system in the era of digital economy.Digital products are the most typical transaction targets in the digital economy.Digital products transaction has no physical objects,and is highly dependent on intangible assets,besides,it is highly liquidity.Therefore,the transnational nature of digital product transaction is more prominent,and the traditional value-added tax theory is challenged.The issue of Value-added Tax Jurisdiction is a major challenge.Specifically,it includes problems such as the impact of traditional VAT jurisdiction theory,exacerbation of tax base erosion and profit transfer issues,and tax collection and administration of VAT.In the era of digital economy,VAT legislation should be carried out in a timely manner to provide clear jurisdictional basis for cross-border transaction of digital products,taxation of cross-border transaction on digital products should be included in the rule of law,and reasonable alternatives should be used to determine place of consumption.).To clarify the nature of cross-border trade of digital products and to establish a value-added tax system that is compatible with emerging economic models.We will improve the implementation of jurisdiction by improving the value-added tax jurisdiction rules for cross-border transaction of digital products,including taxation mechanisms that rely on a sound tax registration system,a combination of reverse taxation and automatic filing,and the use of electronic invoices.In addition,the administration of Value-added Tax collection for cross-border transaction of digital products should be strengthened,for example,through the strengthening of international tax cooperation to promote the exchange of value-added tax information;to strengthen the cooperation of value-added tax administration;to use multilateral means for digital products cross-border transaction are coordinated with VAT jurisdictions to combat the use of digital technology for VAT fraud.The paper begins with the definition of basic concepts and properties,follows the research approach from theory to practice,and establishes an argumentation system with five major parts.The first part is a general survey of the cross-border transaction of digital products and the jurisdiction of value-added tax.The main content of this section is to clarify the basic concepts,nature and characteristics of cross-border digital product transaction,in which the qualitative analysis of cross-border transaction of digital products is the precondition for the analysis of the issue of value-added jurisdiction.The second is to expound the basic principle of the value-added tax jurisdiction of cross-border transaction of digital products,covering content,legitimacy and implementation of the three aspects,which is the theoretical basis for the full text of the argument.The second part is about the challenge faced by the value-added tax jurisdiction of digital products for cross-border transaction.The main manifestations of the challenges faced by digital products in cross-border transaction value-added tax jurisdiction include the impact of traditional value-added taxation theory,the imbalanced distribution of the value-added tax revenue,and the tax collection and taxation dilemma.The main reason for the challenge lies in the international tax system and economic trends.Asymmetry,the characteristics of cross-border transaction in digital products,lagging of international VAT system,and the differences in the value-added tax systems of various countries,and the limitation of international coordination of VAT.The third part is the historical evolution and reference of value-added tax jurisdiction of cross-border transaction of digital products outside the territory.This chapter divides the development history of digital product cross-border transaction value-added tax jurisdictions into budding,development,promotion and maturity stages,and sorts out and summarizes the major events and typical policies in each stage of development in order to grasp the international development of the digital product VAT policy.Trends,combined with China’s actual situation,summed up China’s response to challenges and the construction of relevant systems.The fourth part is the status quo of China’s digital product cross-border transaction value-added tax jurisdiction.With the background of “business reform and increase”,the current domestic digital economy VAT jurisdiction norms and policies are sorted out and combined with international development trends to analyze the deficiencies in China’s digital product cross-border transaction value-added tax jurisdiction system.The fifth part is the improvement of China’s digital product cross-border transaction value-added tax jurisdiction system.This part is the key content of the paper.Combining the first four parts,we propose the suggestions for perfecting China’s digital product cross-border transaction value-added tax jurisdiction system from the actual level,including clarifying the value-added tax jurisdiction rules for cross-border transaction of digital products,improving VAT rules of jurisdiction,and strengthening international corporation of VAT collection and administration.