There is no doubt that taxation has created certain obstacles to the development of cross-border e-commerce and constituted a “trade barrier”. On the one hand, taxation increases the cost of sellers, and will eventually pass most of the tax on to consumers, increasing the expenditure of consumers in the importing country. On the other hand, the complicated tax procedures increase the operating costs of sellers, and some sellers have therefore withdrawn from the cross-border e-commerce industry.
However, from the government’s perspective, taxing cross-border e-commerce goods is, on the one hand, to increase tax revenue, and on the other hand, to ensure fair competition between traditional trade, traditional dealers and online sellers. Judging from the current trend, it is a foreseeable result that countries will impose taxes on e-commerce sales in the future. Therefore, cross-border e-commerce practitioners should be prepared to deal with the various impacts of taxation.
Due to the low level of e-commerce development in most developing countries and the dominant position of traditional business forms, they basically take a wait-and-see attitude towards the taxation of e-commerce and have not formed a complete tax policy. India is the first developing country to impose taxes on e-commerce. In 1998, India comprehensively revised the laws that were not conducive to the development of the information economy and formulated laws to promote the development of the information economy. On April 28, 1999, India issued an e-commerce tax policy, which stipulated that payments made by Indian companies to American companies for the use of computer systems abroad were deemed to be royalties from India and subject to withholding tax in India. On August 31, 2000, Singapore issued e-commerce tax principles, which clearly stipulate the collection of e-commerce income tax and labor tax. India and Singapore are among the few developing countries with clear policy positions.
E-commerce in developing countries is developing rapidly, and tax policies face huge challenges. Most developing countries have vague e-commerce tax policies and unclear positions. India and Singapore insist on taxing e-commerce, and their e-commerce industries have not been suppressed as Western tax experts say, but have developed rapidly.