The Tax Challenges under Technological DisruptionPlatform economy, Social e-commerce, and Content...
Transcript of The Tax Challenges under Technological DisruptionPlatform economy, Social e-commerce, and Content...
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Lixin RaoDirector-General of Tax and IT Administration Department
State Taxation Administration, P.R. China
The Tax Challenges under Technological Disruption
China
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Rapid development of various new economic models supported
by information network technology1
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China has been the largest online retail market for many years
yearly
+8.5%
e-commerce
transactions
4.5 trillion USD
online retail
sales 1.28
trillion USD
cross-border
e-commerce
19.18 billion
USD
yearly
+23.9%
yearly
+50%
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various new economic models playing an increasingly important role
Platform economy, Social e-commerce, and Content e-
commerce
Based on Artificial Intelligence, Big Data, and Internet of Things
Technology Innovation
Model Innovation
driving force
behind the new
economy
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New economic models bring challenges to
traditional tax administration2
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Difficulties and Challenges
High liquidity
Platformization Complex hierarchy
Occultity
Challenges
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Difficult to comprehensively administrate
• Some individuals do not apply for market
registration or tax registration
• Not in the administration scope of tax authorities
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Difficult to locate taxpayers
• Users create their virtual identity online and it is difficult to
determine the actual taxpayer
• Inconsistent actual place of business and the place of
registration
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Difficult to confirm sales revenue
• Difficult to accurately calculate the revenue and invoice from
prepaid card payment, discount, platform credits and etc.
• Sellers that have not registered will not report income to tax
authorities.
• Difficult for the tax authorities to distinguish between sales
revenue and other income.
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Difficult for verify taxpayers’ tax-filing data
• The digital code in the server makes the transaction content
easy to hide and modify.
• The reported sales revenue does not distinguish between online
and offline channels.
• Direct or cross-border supply and delivery of intangible digital
products or services can be done over the network.
• Transaction pricing is more flexible and hidden.
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Tax authorities actively adapt to new technologies, models and changes3
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Legislation
Concept 1 Equal treatment
Concept 2 Registration according
to law
Concept 3 Pay taxes according to
law
Concept 4 Use invoices
Concept 5 Submit information
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Innovate tax administration and service approaches with technologies
• Tax authorities should take the initiative to adapt to the changes
and challenges brought about by new technologies
• Apply new technologies to enhance the capacity of tax
administration.
• Use new technologies such as big data and cloud computing to
implement monitoring and analysis of new economic models.
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Engage in international cooperation
• Value collaboration with our international counterparts and
actively participate in various international forums on e-
commerce and digital economy taxation.
• Help developing countries apply new technologies to improve
their tax administration capacity.
• Learn from international experience to improve tax
administration for the new economy.
• The second “Belt and Road”Initiative Tax Administration
Cooperation Forum in May 2020
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Thank you!