Research On VAT Legal Regulation Of Digital Transactions

The progress of digital technologies such as the Internet,cloud computing,and artificial intelligence has driven the development of the digital economy.In this process,the digital economy has promoted the digitization of traditional transactions.Compared with traditional transactions,digital transactions have unique characteristics such as anonymity of transaction parties,digital transmission of transaction information,and virtualization of transaction space.At the same time,value-added tax(VAT)is China’s largest turnover tax and an important guarantee for the country’s fiscal revenue.The rapid development of digital transactions has brought challenges to China’s VAT legal regulation.Specifically,under the background of relatively lagging reform of the traditional VAT legal system,there are problems in both the material law and the collection and management law of the current VAT legal regulation.After the implementation of "replacing business tax with value-added tax"in 2016,the object of VAT taxation has fully covered goods and services,and so far,there is no value-added Tax Law,and only the "Value-added Tax Law of the People’s Republic of China(Draft for Comments)" was published in 2019,so the current VAT legal system reflects many imperfections when dealing with digital transactions.This paper aims to analyze the basic characteristics of digital transactions from the perspective of the basic theory of VAT legal regulation,explore the origins of current practical problems,and explore the path of VAT legal regulation of digital transactions in China by analyzing the material law and collection and management law of VAT,in order to stimulate the vitality of the digital economy and provide some ideas for the reform and improvement of China’s VAT law.The research content of this paper is as follows:Chapter 1:Introduction,starting from a typical case,explains the research background and significance of the paper,details the current research status of domestic and foreign VAT legal regulation of digital transactions,based on which the research gap is identified,and the research methods and innovations are expounded.Chapter 2:Emphasizing theoretical research,analyzes the theoretical basis of VAT legal regulation of digital transactions,summarizes the characteristics of digital transactions from the perspective of VAT legal regulation based on the concept definition.Then,starting from the three basic principles of tax law,namely the principle of statutory tax,neutrality principle,and efficiency principle,discusses the ambiguity of the binary tax object of VAT in digital transactions,in order to demonstrate the necessity of VAT legal regulation of digital transactions.Chapter 3:Explores the challenges of digital transactions to VAT legal regulation from the perspectives of the material law and collection and management law of VAT.There are many shortcomings in the material law of VAT,which are reflected in the difficulty of determining the taxpayer,the difficulty of identifying the tax object,and the tax rate structure is not entirely scientific and reasonable.At the level of collection and management law,there are challenges in determining tax jurisdiction,challenges brought by invoice management,outdated tax collection and management methods,and difficulties in tax inspection.Chapter 4:Provides recommendations for the improvement of China’s VAT legal regulation of digital transactions in response to the above challenges.Specifically,in the material law of VAT,the identification of VAT taxpayers should be reasonably grasped to promote the clarification and standardization of digital transaction entities.In addition,the withholding and payment obligations of third-party digital platforms and their information provision obligations should be clarified.Secondly,the division of current tax objects should be improved.Finally,in terms of VAT tax rates,it is necessary to further simplify the tax rate levels to simplify the tax system and adapt to the development of digital transactions.At the level of VAT collection and management law,the consumption place principle can be considered in determining jurisdiction.In addition,electronic invoice management can be carried out through blockchain technology to address the challenges brought by invoice management.In addition,for tax collection and management methods and tax inspection,corresponding measures should be formulated to adapt to the development of digital transactions.