In 1996, global e-commerce transaction volume was US$2.3 billion, in 1997 it was US$15 billion, and in 1998 it reached US$50 billion. According to expert predictions, the world's e-commerce volume may grow to between 350 billion and 500 billion US dollars by 2002. Within 10 years from 2000, one-third of international trade will be completed through online trade. my country's e-commerce started late, but many domestic enterprises have realized the coming of the Internet revolution, and online trade has developed rapidly. After the online trading of the Shenzhen "China International High-tech Fair" was launched in 1999, 3,500 high-tech items were strictly inspected. After choosing to go online, the online transaction volume exceeded the 10 billion mark in just one month. The development of this new business model has revolutionized the traditional forms of commodity circulation, service provision and financial management, and has also posed new challenges to taxation and taxation legal systems. The growing development of e-commerce provides material for reform of the current tax legal system, whether in terms of turnover tax, income tax, foreign-related taxation, and basic tax theory.

1. Confusion about tax substantive law

Tax substantive law is also called tax law. Any tax law must clearly stipulate what is taxed, who is taxed, and who is taxed. standards and the time, link and place of taxation. These elements are standardized into taxable elements through tax law. Should e-commerce be recognized as a method of production and operation? If it is considered a mode of production, who is the taxpayer? How to determine its tax liability, tax links and tax location? How have the extension of tax objects and tax calculation basis changed? These problems make tax substantive law face confusion and trouble.

1． Taxpayers are characterized by diversification, blurring and marginalization. For example, is the website owner a taxpayer? Manufacturers and consumers conduct direct transactions online. Who is obligated to withhold and pay taxes? The changes in taxpayers are mainly reflected in two aspects: (1) The number of e-commerce taxpayers has been increased, especially those taxpayers whose entire business is e-commerce. As far as overseas taxpayers are concerned, if the websites or e-mails set up by foreign enterprises and individuals in China to engage in e-commerce are regarded as permanent establishments, they will undoubtedly become a new category of permanent establishment taxpayers in my country; on the other hand, overseas websites or People with electronic mailboxes have income from China, especially franchise income. From the perspective of safeguarding tax jurisdiction, this type of e-commerce operators should become taxpayers in my country. (2) It is very difficult to identify taxpayers when providing taxable services or transferring intangible assets online. In cross-border transactions, when labor services or intangible assets are provided digitally through the Internet for domestic use, it is a taxable activity under business tax. However, since foreign labor service providers may directly target mass consumers, it is difficult to determine whether the labor service provider has operating institutions and agents in the country; the transferee of intangible assets is very difficult to deal with online transactions (especially when digital encryption technology is widely used). Difficult to determine. In this way, it is extremely difficult to identify business tax taxpayers.

2. The objects and types of taxes are difficult to monitor and define. The taxable objects of the current tax law are mainly logistics, which is easy to monitor, while the taxable objects under e-commerce are mainly information flow, and coupled with electronic encryption technology, it is difficult to monitor and define. Whether value-added tax or business tax is levied on the sales of e-commerce goods: In e-commerce, there are two ways to sell goods: online sales (on-line sale) and offline sales (off-line sale). The so-called online sales refer to products that can be transmitted and sold digitally through the Internet; the so-called offline sales refer to the relevant sales agreement reached through the Internet, but the goods in the agreement cannot be transmitted digitally through the Internet, but can only be transmitted in the form of tangible goods. This is no different from the traditional sales method, except that the agreement is reached through the Internet, and the performance of the contract is still in the real society. At present, some tangible goods sold in traditional ways (such as computer software, music CDs, books, pictures, etc.) can be sold to customers in the form of downloads through the Internet, that is, online sales. In e-commerce, for these two types of sales, are the 17% value-added tax levied on the goods sold or the 5% business tax levied on the intangible assets? China's current tax law does not provide for this, which will lead to confusion in tax treatment in practice.

3. The tax payment process is difficult to identify and control. The current tax law's provisions on tax payment are based on the circulation process of tangible goods and business activities, and are mainly applicable to taxation of turnover amounts. In e-commerce, because the transaction objects are difficult to identify and control, the original tax payment regulations are difficult to determine. The impact on the tax payment process is that operators and consumers directly conduct online transactions, transcending the boundaries of time and space. The result may be: the loss or transfer of certain tax bases, which increases the risk of tax loss. The tax base shared among intermediaries under traditional transactions may be lost under online transactions, resulting in a loss of tax revenue. The disappearance of intermediaries will lead to the disappearance of corresponding tax points. Taxing imported goods is a common practice in most countries internationally. According to the provisions of the "Interim Regulations on Value-Added Tax", all units and individuals that import goods shall pay value-added tax in accordance with the regulations, and this value-added tax shall be collected by the customs. For enterprises, units and individuals entrusting agents to import goods subject to VAT, the import agent (intermediary) must pay the import VAT on their behalf.

In offline transactions, there is no difference from traditional transactions. In traditional transactions, imported goods mostly pass through agents or middlemen and then are transferred to consumers or buyers. Even if you import by yourself without going through a middleman, the customs will collect VAT on your behalf. When these goods are transmitted digitally, will these buyers, who are ordinary consumers, take the initiative to file tax returns? How does the taxing authority grasp the content of the transaction? In e-commerce, some products can be directly provided to consumers without intermediaries (such as agents, wholesalers, retailers, etc.). The tax base originally allocated to these intermediaries may be lost. From an international perspective, this means that some countries may increase their tax base, while others may decrease it.

4. The tax deadline and tax location are difficult to determine. Judging from my country's current tax law, tax deadlines are divided into annual collection, quarterly collection, and periodic collection. It is extremely difficult to confirm the time when tax obligations occur in an e-commerce environment. Therefore, the current tax law's provisions on tax payment deadlines may become a piece of paper. It is even more difficult to identify the source of income and classify the types of income. The emergence of e-commerce has caused disputes among countries in the judgment of the source of income. Source tax jurisdiction and resident tax jurisdiction are facing severe challenges. For example, if a Chinese citizen sets up a website in France to sell goods directly to the international market through the Internet, is the income obtained by the Chinese resident from the website derived from French income?

Confusion about the Tax Collection and Administration Law

The Tax Collection and Administration Law refers to the general term for the legal norms governing the relationship between tax collection and management. Its main contents include tax administration, tax collection, tax inspection and Legal Liability for Violations of Tax Laws. E-commerce brings new challenges to tax collection and administration. Some people believe that e-commerce will lead to a large loss of tax revenue because its transactions are intangible and will leave no traces of the transaction process, making it more difficult to control. Others say that e-commerce brings new opportunities to the tax department and also turns a A new challenge lies ahead of the tax authorities—tax collection and administration of online trade.

1． There is a huge loss of tax revenue. Many transaction objects are converted into "digital information" and transmitted on the international Internet. It is difficult for tax authorities to determine their contents. Tax losses will increase with the expansion of the use of the Internet in trade. For example, after mail order companies in the United States moved to the Internet, the government lost approximately US$3 billion in tax revenue. At present, some foreign-funded enterprises import software not through customs but through the Internet. The entire process does not use any tangible media. These software products with high market value do not declare customs duties and sales value-added tax in accordance with the law. It is estimated that foreign-funded enterprises import software products worth 20 billion yuan every year. According to the regulations of 9% import tariff on software products and 17% sales value-added tax, this tax revenue may be as high as 5.2 billion yuan. [①]

2． Confirmation of tax jurisdiction is difficult. From the current point of view, all countries in the world implement the principle of resident jurisdiction and income source jurisdiction in tax management. Residents are taxed on their global income, and non-residents are taxed on their own country's income. In e-commerce, transaction entities can be domestic or cross-border. Due to the extensive and untraceable nature of cyberspace, it is difficult to determine the source of income and its jurisdiction is also difficult to define.

3． Tax audits are hard to get used to. Due to the hidden characteristics of the e-commerce business model, it is difficult to detect its business operations. Due to the method adopted by e-commerce, transactions do not occur face-to-face, the transaction location is not fixed, and both parties to the transaction do not have fixed locations and warehouses, which makes tax There is no way to start the audit. We can neither adopt the method of punishment according to the account nor the method of approved collection.

4. The problem of international tax avoidance has intensified. Product research, design, production, and sales are distributed around the world through the Internet, and you only need to establish a website in a tax haven. At the same time, the widespread use of electronic currency and information encryption technology has also made taxpayers’ pricing in transactions more flexible and concealed. As e-commerce is a form of trade, the date of payment, the date of shipment, the location of the institution, and the place where economic activities or services occur are all elusive. If these conditions exist, the tax authorities will not be able to comply with the tax payment time and tax deadlines stipulated in the tax law. and taxation at the place of taxation. International taxes are more difficult to deal with. First, there are difficulties in determining a permanent establishment. E-commerce enables a large number of consumers to conduct transactions through a website located on a server in the country of origin. This raises the question of whether the server can be used as a permanent establishment. Even if the server is designated as a permanent establishment, foreign enterprises can easily Moving servers outside the country still provides digital goods to consumers in the country, but the country loses the power to tax them. In addition, the server allows domestic and foreign customers to download digital goods, and its source of income is no longer limited to the country where it is located. It is not clear how to define and tax part of the profits from abroad. Secondly, international tax avoidance is increasing day by day. E-commerce makes it easy for large multinational companies to transfer pricing or transfer profits within themselves, while establishing a base company in a tax haven is as easy as setting up a website on a server in a tax haven. [②]

5． Collection information and taxation basis have encountered resistance. E-commerce does not occur in a physical location, but in the virtual world of cyberspace. In online transactions, vouchers, account books and statements can all be filled out electronically on the computer and can be easily modified without leaving any clues or traces, and electronic encryption technology is used.

Because online transactions are paperless, intangible, instant, and concealed, they are outside tax monitoring, resulting in a proliferation of tax collection points and making it difficult for the tax bureau to obtain sufficient collection and management information. E-commerce is different from traditional commerce in terms of transmission media. Taxation of traditional business activities is based on examining the company's accounting documents and using this as the basis for taxation. E-commerce is a paperless trade conducted through an electronic payment system, and the accounting vouchers used as the basis for corporate taxation do not exist, making it difficult for the tax department to trace the transaction status of the company, creating a new blind spot in tax collection and administration.

6. Tax withholding is not possible. E-commerce has changed the traditional way of marketing goods. With just a click of the mouse, dealers can browse products online, purchase the types of products they want to distribute online, contact customers online, use the Internet to purchase goods, and pay for goods with electronic money. Producers and sellers can directly conduct transactions without going through intermediaries, which will have an impact on the tax withholding and payment methods.

3. Correctly resolve the contradiction between tax law and e-commerce

Since e-commerce is a business activity, taxation must not be avoided. A society governed by the rule of law requires taxation in accordance with the law. In order to make e-commerce legally observable and better solve the problems that this new transaction method brings to taxation, normative provisions related to e-commerce taxation should be added to the current tax law. Without adding new types of taxes on e-commerce, we should improve the current tax laws and supplement e-commerce-related provisions for my country's value-added tax, business tax, consumption tax, income tax, tariffs and other taxes. According to the characteristics of Internet trade, the connotation and denotation of Internet tax concepts such as residents, permanent establishments, sources of income, goods, services, and franchise transfers are redefined, and provisions related to the use of e-commerce are supplemented. When formulating tax provisions, it is necessary to fully consider that our country is still a developing country. In order to safeguard national interests, the principle of equal emphasis on resident jurisdiction and regional jurisdiction should be implemented. Combined with the characteristics of e-commerce, a resident tax jurisdiction priority system should be implemented. For those companies that provide business services whether they are located in tax havens or using sites located in different countries, they should negotiate with the international community to mutually recognize the priority status of each other's resident tax jurisdiction in legislation, so that they can tax their global income. Taxation, in this way, can not only effectively prevent tax avoidance and safeguard national tax interests, but also reduce international disputes over tax jurisdiction. [③] As far as turnover tax is concerned, the author agrees with the view that 17% value-added tax should be levied on offline sales (sales of tangible goods), because the goods sold offline fully have the characteristics of ordinary goods and comply with the "Interim Value-Added Tax" The definition of goods in Article 2 of the Implementing Rules of the Regulation: Goods are tangible personal property. For online sales (sales of intangible goods), a 5% business tax should be levied. Because online sales are a special transfer of copyright rights, they fall under the category of transfer of intangible assets and are subject to business tax. [④]

Build a collection and management system that complies with the principles of fairness and efficiency. The network economy is an economic form in which the market operates with high efficiency. The tax collection and administration system should follow the pace of the network economy and e-commerce. Otherwise, it may hinder the development of e-commerce and the efficiency of tax collection and administration will also be greatly reduced. In order to adapt to the development of e-commerce, the tax collection and administration system should implement electronic reforms, strengthen the construction of the tax authorities' own networks, achieve full international Internet connectivity as soon as possible, and strengthen online cooperation and cooperation with tax authorities of various countries to prevent tax losses and combat tax evasion. Behavior, actively promote the electronic tax filing system, taxpayers fill out declaration forms through the Internet, calculate and declare taxes, and implement digital certification and tax data filing systems. As far as the tax collection and administration legal system is concerned, the author recommends: (1) Establish a special e-commerce tax registration system to strengthen the management of e-commerce customers. After completing the online procedures, taxpayers must go to the competent tax authorities to register for e-commerce tax and obtain a special tax registration number. When applying for an e-commerce registration certificate, taxpayers should fill in the "Application for E-commerce Tax Registration Report" and provide relevant information on online transactions, especially the backup of computer super password keys. At the same time, the tax authorities should strictly review the relevant information submitted by taxpayers, register them one by one, and ensure confidentiality for taxpayers. This puts e-commerce taxpayers under the supervision and management of tax authorities. [⑤] (2) Realize the combination of technology and law and establish a dynamic legal system. my country's electronic tax filing and tax collection are still in their infancy, involving the tangible connection of a series of relevant entities such as taxpayers, tax administration agencies, banks, and the treasury in terms of data formats, transmission frequencies, security mechanisms, etc., as well as the coordination of inter-department data exchange mechanisms. Complex issues such as these need to be included in the legislative process as soon as possible. [⑥] Design tax collection software with tracking and statistical functions to strengthen online transaction control. The tax department should organize computer experts to research and develop a new technology that can control transactions, that is, set up tax collection software with tracking and statistical functions on the enterprise's smart server, and automatically calculate taxes according to the transaction category and amount when each transaction is carried out. . It is necessary to commit to the research and development of a paperless electronic taxation system, realize international taxation cooperation through the Internet, and have the means to control and record the transaction activities of taxpayers on the Internet (such as establishing digital ID cards, etc.), so that tax authorities and Banks, network technology departments and the international Internet communicate closely to gain an in-depth understanding of taxpayer information, so as to provide more sufficient evidence for tax collection, management and audit operations.

The establishment of an online business center requires enterprises engaged in e-commerce to conduct online transaction activities through the online business center in order to fully understand their online transactions. At the same time, the network business center, the tax bureau information center, the computer center of the People's Bank of China's Treasury Department and enterprises (taxpayers) are connected into a standardized network, and the electronic mail system is used to transfer declaration forms and receipts between various tax links. You can also transfer tax invoices and transfer information between the bureau and the treasury, and you can also entrust the online business center to withhold and pay taxes to ensure that the taxes are paid into the treasury in a timely and full amount. To track payments for e-commerce transactions, consumers usually pay for services provided on the Internet through some kind of guarantee. Widely accepted guarantee methods include: credit card, phone card, debit card (a debit card). When private individuals pay fees related to e-commerce transactions to foreign businesses, tax authorities can require banks, credit card companies, and other financial institutions to withhold and remit value-added tax or business tax. [⑦] (3) Provisions on electronic records should be added to the tax law, requiring every taxpayer engaged in e-commerce to keep records in a readable electronic form. When electronic records are converted from one format to another, taxpayers have an obligation to ensure that the converted records are accurate and readable. Records must be maintained in written form when conversion is not possible or there is no other electronic alternative. In e-commerce, since all records can be encrypted by taxpayers, it should be stipulated in the tax law that if the party does not reveal the document or provide the decryption password to the tax department, then the tax department can determine that the record does not exist. [⑧]

E-commerce should be taxed, but should we start legislation to tax it immediately? This cannot be said. E-commerce tax legislation should be placed within the entire national macroeconomic system and should not be rushed. However, legislative research cannot be given up. Although the United States has not taxed online e-commerce, a tax legislation draft has long been formed, but it has not been passed by Congress. Internationally, some developed countries, such as the United States, Canada, Germany, France, etc., have begun to study the tax issues involved in e-commerce. Although legally speaking, both online e-commerce transactions and offline e-commerce transactions must pay taxes equally. However, since online e-commerce is the real revolution in the development of e-commerce and the core of the future network economy, my country's network economy is still in its infancy and needs strong encouragement and stimulation. At the same time, there are still practical difficulties in taxing online e-commerce. Therefore, it is the best choice to temporarily exempt online e-commerce from taxation. When formulating e-commerce tax laws, we must be proactive to a certain extent. We must take into account the problems that the development of the Internet economy may bring to taxation in the next 5 to 10 years, so that relevant tax laws have a certain degree of advancement, stability, and continuity. In the long term, the tax burden on traditional trade and e-commerce should be kept consistent. However, in the short term, it is appropriate to adopt appropriate preferential policies for e-commerce in my country to promote the rapid development of e-commerce in our country and open up new sources of tax revenue.