TITLE:
Multinational Tax Base Erosion Problem of the Digital Economy
AUTHORS:
Wei Peng
KEYWORDS:
Digital Economy, Base Erosion, Profit Transfer, Tax Collection and Administration
JOURNAL NAME:
Modern Economy,
Vol.7 No.3,
March
25,
2016
ABSTRACT: Recently, Amazon and Google and other large multinational companies are reported
that they use changing corporate structure to avoid tax. This behavior caused widespread
international concern. Many multinational companies use digital economy transactions,
and take advantage of international tax loophole to erode basic tax. This emerging
trading pattern is a huge challenge to national tax authorities. Thus, researching
the tax mechanism of Transnational Corporations in the digital economy, a better
understanding of the behavior of multinational tax avoidance is important to our
country. This paper analyses the digital economy trade transaction characteristics,
and points out the cause of the tax erosion in the area of digital economy; then
combines with characteristics of the tax system China, discusses on measures taken
by China to deal with the tax avoidance in the digital economy.