Ecommerce has great impact on current tax principle

Ecommerce has great impact on current tax principle in several aspects:

First, tax levy has territorial management principle, which has been affected by ecommerce. Online trade business made tax payers movable and tax payers only need one computer, a modem and a telephone to change the business locations easily. Tax payer could move from one country to another country. So ecommerce has affected the tax territorial management principle.

Second, tax levy requires certificates, such as vouchers, account books and sheets verification. Ecommerce certificates are digitalized and all the information is processed on the computer so the information can be changed easily, leaving no trace. Tax bureau cannot get real information the first time which is an obstacle in ecommerce tax levy.

Third there are some taxation blind areas now. It is not easy to apply current value added tax principle on online trade business transactions. It is very hard to identify intangible assets transferring or labor service on online trade.

Fourth, fair principle is affected. There are more ways for ecommerce conductors to avoid tax, since they could click the mouse and change the address into low tax principle areas or tax haven areas so the profit can be saved more and more.

IBUonline is an innovative B2B portal and it has pay attention to ecommerce tax policies in China.

Please go to IBUonline homepage to register for free, if you are trying to develop foreign trade on B2B platforms.