As stated earlier, the line between selling products, providing services, and franchising has blurred in e-commerce, and it is difficult for tax authorities to determine whether an intangible, digital transaction is about selling products, providing services, or granting concessions. Therefore, it is not clear whether the current tax law applies value added tax or business tax to an e-commerce activity.
When providing labor services via the Internet in a digital way, transferring intangible assets directly to a large number of consumers or recipients, taxpayer identification is extremely difficult, especially when digital encryption technology is widely adopted. For example, foreign service providers may directly face a large number of ordinary consumers, which makes it difficult for tax authorities to collect taxes.
The place of business tax in China is the place of labor service. In e-commerce, provide remote services are implemented through the network, the characteristics of network virtualization allows a lot of place of business virtualization - into a company online, and virtualization can make tax payment main body's premises in expanding coverage area, the traditional meaning of the premises to reduce or disappear, which will reduce some areas of the business tax. When the traditional business premises and permanent institutions no longer exist, the identification of tax payers also causes problems.
With the development of economy, the provision of labor services and the consumption of labor services are separated, such as telemedicine, network auction, network consulting and so on. The tax base of business tax will be eroded if the sources of income from services are determined according to the local standards. That is a big disadvantage for China, whose services industry lags far behind that of the developed world.
There are two levels of problems in the enterprise income tax system. The second level includes the conflict between the principle of source of income and the principle of residence under the premise of adhering to the principle of dependency and the conflict between the principle of inhabitant and the principle of citizen under the premise of adhering to the principle of belonging to person. According to the principle of dependency, a state has the right to levy taxes on all income derived from its territory, regardless of whether the source of the income is a national or a foreign national; According to the principle of personal ownership, a state has the right to tax all the income of its inhabitants or citizens, whether they derive it from the country or from a foreign country.
Under the condition of electronic commerce, as a result of the enterprise income may come from all over the wo
