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What Are The Implications For Domestic E-commerce From The Comprehensive Taxation Of Us E-commerce?
Kinghood International Logistics Inc | Updated: Jan 07, 2019

On June 21st America's Supreme Court ruled, 5-4, that Internet retailers can be required to pay GST in states where they have no physical presence.This means that the us consumption tax system officially covers all e-commerce, and the tax dividend period for American e-commerce officially ends. They will enter the era of equal price competition with brick-and-mortar retailers.

Tax fairness is not only historical and changing, but also the standard to measure fairness is often multi-dimensional, so tax fairness is also relative.Such values change dynamically with the development of The Times.This will also have practical guiding significance for the future of our country's e-commerce industry. It will provide a feasible option for the major proposition of tax reform, namely, the distribution of wealth and the adjustment of tax, which will increase the reform in a relative historical period.

Tax law, from the people, with the people.E-commerce is the result of the development of "Internet + business", and it belongs to business in essence. Since e-commerce is the main body of the business circle, it obviously has no right to evade taxes.Therefore, e-commerce tax payment is imperative, but the tax rate and payment method can be discussed.For example, the tax rate can be preferential at the beginning of opening, tax payment method can be deducted by the platform according to the transaction amount and so on.

For B2B and B2C, because the main body is the business entity registered by industry and commerce and tax, as an e-commerce, it is just a change of business mode, so there is no tax dispute.But to C2C individual net inn character, tax basis is sufficient but tax difficulty is big.Individual online stores can be levied periodically according to the individual industrial and commercial households, and because individuals must operate through third-party platforms, third-party trading platforms can be used as agents.

Although there are no specific laws and regulations on e-commerce taxation in China, it does not mean that enterprises or individuals engaged in e-commerce on behalf of China do not need to pay taxes.First of all, according to the provisions of article 1 of the latest revised interim regulations on value-added tax at the end of 2017, all units and individuals selling goods or services, etc. within the territory of China are VAT taxpayers and shall pay VAT in accordance with these regulations.In addition, in order to support the development of small and micro enterprises, the announcement of the state administration of taxation on the exemption of value-added tax for small and micro enterprises from January 1, 2018 stipulates that small-scale VAT taxpayers with monthly sales of less than 30,000 yuan will be exempted from value-added tax between 2018 and 2020.Of course, such regulations are also applicable to e-commerce operators.In other words, there is no regulation that e-commerce enterprises do not need to pay tax in China. If they are not exempt from tax, they are only periodic preferential measures for small-scale VAT taxpayers, and such preferential measures are also applicable to offline enterprises.

For Chinese sellers, there are several immediate problems. First, if states follow the Supreme Court's ruling, they will need the state's tax number for any goods they sell there.Second, the seller needs to collect and pay this part of the consumption tax on behalf of others. The consumption tax rates and tax procedures in different states in the United States are not the same, which requires the seller to make great efforts to understand and master.Third, it is possible to recover the consumption tax before the ruling.What's more, the us tax on e-commerce will greatly enlighten Chinese tax authorities.At the same time, with the exchange of government tax information, the seller's tax records in the United States will also become its tax information in China.

According to the report on the development of China's cross-border e-commerce export in 2017 released by the e-commerce research center (, China's major e-commerce export countries accounted for only 15% of the total in 2017, which was not large enough to have a big impact on the whole industry.In addition, this law of the United States has its rationality. Online enterprises and offline enterprises apply the same tax regulations in line with the principle of fairness and justice. In fact, there are no special tax incentives for e-commerce enterprises in China.

For individual sellers in the C2C model, as the profit of online stores is already low, once it is included in the scope of taxation, it will only increase their burden, which will inevitably transfer the pressure of taxation to consumers. Price increase is an inevitable move in the short term, and in this way, the price advantage of online shopping may no longer be obvious.In addition, some unknown small brands suffer from brand effect and fan effect, can only through brushing to create a hot sales illusion, attract consumers to place orders.Once the tax is strictly checked, sellers have to pay for the pit they dig themselves, so strict taxation is a powerful weapon against brushing.

At present, there are four main types of e-commerce modes in China: B2B, B2C, O2O and C2C.For the first three types of e-commerce models, because the seller of the transaction (whether the platform is self-operated or the seller who enters the platform) is a registered industrial and commercial enterprise, they have been included in the scope of offline taxation and supervision where the company is registered, and there is no such thing as tax evasion.

Tax for electricity sellers is actually a process of evolution, some non-standard sellers through the "single" brush to brush the false sales and the high praise, affect the fair competition between the sellers market, and once the existing tax system and electrical business docking platform background data, to hit the "brush" is also a good dose of strong medicine, can make the transaction data more transparent, trading environment have been purified.

Differentiated taxation can be applied to individual sellers, enterprise sellers and platform enterprises.For example, the turnover is lower than the national legal limit can continue to insist on exemption;Tax should be introduced gradually, but not too hard, so as not to kill the sprouting small sellers.For college students because of the need to learn to open online shops, special groups of online shops and personal second-hand replacement of the temporary store and other non-business shop, to special treatment.Moreover, in the future, the taxation system for e-commerce, once connected with the background transaction data of e-commerce platforms, will effectively combat "brushing".

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