The Taxation of the Cross-Border Transactions in the in the Development of Digital Economy: Focusing on the Retail Industry

Purchasing goods from abroad has gradually become a common thing in our daily life. When making cross-border transactions, tax collection and tax audit inevitably become problems. In this thesis, the writer would like to prompt people’s awareness of this issue with an actual case and attract their interests in it. It is also worth discussing whether the handling of these problems conforms to current regulations. With the development of information and communication technologies, the age of digital economy has come, generating new trading patterns. E-commerce gradually occupies an important position in transactions, and virtual currencies appear. In addition to the constant evolution of itself, the retail business has been affected by the trend of digital economy. Under the digital economy system, retailers face difficulties about tax collection. Organisation for Economic Co-operation and Development (OECD) has been focusing on the impacts that e-commerce has made. Last year the OECD issued Action Plan 1 on Base Erosion and Profit Shifting – address the tax challenges of the digital economy. Among those issues, there are several discussions concerning the transitions of business model, as well as the tax collection issues among transactions. Regarding the domestic tax collections, issues like whether the related regulations for income tax and business tax are reasonable or whether there is still any improvement to make are still open to detailed discussions. The questions of whether, our current regulations and guidance could keep up with international trends, as well as future tendencies are closely related to the aftertime of digital economy. At last, we need to ponder on the problems which might emerge under our current regulations when confronted with cross-border transactions.