China e-commerce tax plan for 2015

Tue 30th Sep 2014

China is reviewing the introduction of tax on online sales of goods, e-commerce, in 2015. The plan would include a tax system administered by e-commerce platforms in the world’s biggest online shopping economy.

There is widescale non-disclosure of taxable revenues by Chinese traders on e-commerce sites such as Alibaba, and the State Administration of Taxation (SAT) want to eliminate this wide scale tax evasion through a tax around payments.

This will require online site and e-commerce platforms to incorporate tax calculations, and potentially act as the state’s tax collector on e-retailers.

Chinese VAT reform

Chinese VAT is in the middle of an extensive reform programme, which commenced in 2012 with a pilot. It went country-wide in 2013. A number of industries (e.g. financial services, retail and construction) are still operating under the old VAT and Business Tax regimes.