E-commerce in China will not be tax-free

State Administration of Taxation official explains that the government regards e-commerce transactions similar to departmental store purchases.

State Administration of Taxation official explains that the government regards e-commerce transactions similar to departmental store purchases. 

BEIJING (Asia Pulse) - China has no plan to exempt the fast growing e-commerce from taxes, according to a top Chinese tax official.

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In an interview with the news weekly Outlook, Jin Renqing, director of the State Administration of Taxation (SAT), noted that some people had misunderstandings about e-commerce. "To put it simply, e-commerce refers to business transactions conducted on the Internet. It is, in essence, the same as those made in department stores," Jin was quoted as saying.

E-commerce, featuring high technologies, reduces the cost of doing business and expands the business coverage. It is expected to hugely impact the world's economic development. It is believed that tax exemption for e-commerce will appear in countries with the fastest development of e-commerce dominated markets.

"Considering the neutral principle of taxation and the protection of developing China's taxation jurisdiction, our country will not pursue a tax-free policy for the fast developing e-commerce," the official noted. Jin also revealed that the SAT has set up a special task force to focus on the study of e-commerce taxation.