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Project Details
Funding Scheme : Early Career Scheme
Project Number : 24611921
Project Title(English) : Taxation of the digitalised economy in China: challenges and proposals 
Project Title(Chinese) : 中國經濟數字化面臨的稅收問題:挑戰與應對 
Principal Investigator(English) : Prof Wang, Jingyi 
Principal Investigator(Chinese) : 王靜宜 
Department : Faculty of Law
Institution : The Chinese University of Hong Kong
Co - Investigator(s) :
Panel : Humanities, Social Sciences
Subject Area : Social and Behavioural Sciences
Exercise Year : 2021 / 22
Fund Approved : 424,000
Project Status : On-going
Completion Date : 31-12-2023
Abstract as per original application
(English/Chinese):
The development of information and communications technology (ICT) has significantly changed how business is conducted. China has also undergone rapid digitalisation of its various economic sectors, but has not enacted any special digital tax rules in this respect. This research will attempt to identify a suitable taxation policy from the perspective of China. Digitalisation expands the reach of business operations far beyond national boundaries. Nevertheless, both digitalisation and globalisation confront national tax authorities with significant challenges. In regard to international taxation in particular, these challenges have been overwhelming, because the allocation of taxing rights on cross-border economic activity relies on an explicit physical connection between the taxable subject and the taxing jurisdiction. The difficulty of properly taxing multinational enterprises (MNEs) has been exacerbated by the increasingly digitalised economy. International organisations and individual states have therefore been forced to take action. The first part of the project will examine the current tax regime in relation to the digitalised economy, in particular cross-border businesses based in China from two perspectives, namely inbound and outbound digitalised economic activity. The business models reviewed include China-based enterprises investing in domestic and overseas e-commerce markets and foreign enterprises doing business in and with China. This indicates that the challenges in regard to taxation could be manifold, involving direct taxation (individual and enterprise income taxation) and indirect taxation (value-added tax, excise tax and so on). The goal is to establish what challenges the Chinese tax authorities face when attempting to tax digitalised economic activity. The second part of the research will use comparative legal analysis to investigate the special tax rules or proposals that have been adopted or suggested by international and regional organisations and individual jurisdictions to tackle the tax challenges posed by the digitalised economy. The comparison will focus on jurisdictions that share similarities with China in terms of the development level of the digitalised business sector. The analysis will consider the specific economic and taxation situation in the examined jurisdictions to analyse their perceived issues and countermeasures. Using the findings of the first two parts, the third part will consider how China could most efficiently and effectively tax the digitalised economy. The research aims to propose a suitable plan for the government to properly exercise its taxing power, at the same time complying with relevant international treaty obligations as well as maintaining the vitality of the domestic market and competitiveness of the digitalised industry.
現代社會信息和通信技術的發展極大地改變了商業的運作模式。中國經濟的各行各業也經歷了快速數字化發展,但尚未針對經濟數字化製定任何特殊的稅收規則。本研究將嘗試從中國的角度出發探討相應的稅收政策。經濟的數字化使得商業運營的範圍不再受到國界或地理位置的限制。然而,經濟的數字化和全球化都為各個國家的稅務機關帶來重大挑戰。特別是在國際稅收的管理方面,這些挑戰是巨大的,因為跨境經濟活動的徵稅權的傳統分配方式依賴應稅主體和稅收管轄區之間的明確實體性的聯繫。而日益數字化的經濟加劇了對跨國企業適當徵稅的困難。因此,在國際組織和不同國家的層面都提出了新的應對方法。該研究項目的第一部分將從兩個角度,即對內和對外數字化經濟活動,審查與數字化經濟相關的現行的中國稅收制度。待研究的商業模式包括投資國內外電子商務市場的中國企業和在中國做生意的外國企業。這意味著數字經濟化對稅收方面的挑戰可能是多方面的,包括直接稅收(個人和企業所得稅)和間接稅收(增值稅、消費稅等)的問題。這一部分的研究目標是確定中國稅務機關在嘗試對數字化經濟活動徵稅時面臨哪些挑戰。該研究的第二部分將使用比較法律分析的方法來研究國際和區域組織以及不同國家和地區在應對數字化經濟帶來的稅收挑戰時,已採用或建議的特殊稅收規則。這一部分的比較研究將側重於在數字化經濟的發展水平方面與中國相當的國家或地區。該研究的第三部分將基於前兩部分的研究結果,探討中國如何有效地對數字化經濟進行徵稅管理。該研究旨在為政府建議適當的稅收政策和規則,一方面有利於稅務機關適當行使稅收權力,同時可以使中國遵守相關國際條約義務,以及保持國內市場的活力和數字化產業的競爭力。
Research Outcome
Layman's Summary of
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  SCREEN ID: SCRRM00542