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Research On The Identification Rules Of Permanent Establishments Under Cross-border E-commerce

Posted on:2021-04-16Degree:MasterType:Thesis
Country:ChinaCandidate:M D YuanFull Text:PDF
GTID:2436330623967158Subject:International Law
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The development of cross-border e-commerce has broken through the traditional transaction model that takes offline physical entities as essentials,and can use the Internet and digital technologies to cross the boundaries of time and space.The principle of permanent establishment(“PE”)is an important basis for dividing tax jurisdictions.It is difficult to adapt to the new transaction model,and it is possible for cross-border e-commerce to use rule loopholes to evade and avoid taxes.Therefore,new connection rules are urgently needed.Although the international community has proposed a variety of reforms to replace traditional principle of PE in this regard,from the current international practice,it is a general trend to supplement explanatory application methods on the basis of existing identification rules of PE.In response,OECD has been at the forefront of the reform and has developed an interpretive application programme,including the OECD Model and Notes and the “BEPS Action Plan” issued in 2015,which has played a guiding role in responding to the impact of e-commerce on PE determinations.“BEPS Action Plan :Action 1”,which proposes a new approach to the identification of " Significant Economic Presence " as an alternative to the traditional rules for the identification of PE,is still at the theoretical stage due to poor practicality and the risk of overbroadening the scope of the identification of PE."BEPS Action Plan: Action 7" insists on adding explanatory notes to the identification method of existing identification rules of PE,and incorporates the issues that are prone to controversy in current cross-border e-commerce into the framework as much as possible.This explanatory plan conforms to the original intention and internal logic of PE,and is consistent with the interpretation tendency adopted in the practical operation of various countries.In 2017,the OECD Model(2017)formalized the amendments to the principle of PE in BEPS Action Plan 7 in the form of articles,which together constitute the "existing interpretive application scheme".In contrast to the current situation in China,the imperfect laws lead to the risk of massive loss of tax in the field of cross-border e-commerce.At the level of domestic law,there is a lack of systematic legislation on the identification rules of PE.The existing rules are inadequate in dealing with cross-border e-commerce.At the level of international law,they are more reflected in bilateral tax treaties,but China's bilateral tax treaties were signed earlier,which has not been revised and improved in a timely manner.Considering that China is gradually changing from a capital-importing country to a capital-exporting country in cross-border e-commerce,the author believes that the existing interpretive application scheme should be included in bilateral tax treaties,and domestic legislation should be effectively connected with international legislation.Following the basic framework of PE is of great significance for effectively responding to the plight of cross-border e-commerce in the identification of PE,and it can safeguard China's tax sovereignty to the greatest extent.Also in the longer term,it would be useful to experiment with alternatives,such as " Significant Economic Presence ",to better cope with the development of the digital economy and more diverse forms of tax evasion.This article will be divided into four parts.The first part introduces the principles of PE and their traditional identification rules,to form an overall understanding of PE.The second part discusses the impact of the new transaction model on the identification of two types of PE through the interpretation and analysis of the concepts and characteristics of cross-border e-commerce.This paper focuses on the agency permanent establishment which are often used by cross-border e-commerce as a means of tax evasion,the ambiguity of the provisions,and the differences of understanding among countries in the specific application process.The third part takes OECD's reform measures to adapt to e-commerce as the main research object,focusing on the significance of the explanatory plan formed by the "BEPS Action Plan:Action 7" in dealing with the defects of the traditional identification rules of PE,and combined with international practice to analyze the rationality of the explanatory plan.The fourth part mainly introduces China's existing identification rules ofPEand their deficiencies.Proceeding from two aspects of domestic law and international law,we put forward feasible suggestions on how to effectively incorporate the OECD explanatory plan,and protect the tax benefits of China's cross-border e-commerce to the greatest extent,and realize the effective connection between domestic and international law.
Keywords/Search Tags:Cross-border e-commerce, Identification rules of Permanent Establishment, existing interpretive application scheme
PDF Full Text Request
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