MOC: China is Mulling E-Commerce Tax

June 7, 2013 Posted by China Briefing Reading Time: 2 minutes

Jun. 7 – Research on a potential E-commerce tax is underway, according to Yao Jian, spokesman of China’s Ministry of Commerce (MOC).

“We learned that relevant departments are working on the research for an E-commerce tax. Our overall goal is to promote the healthy development of the industry,” said Yao, without revealing the tax rate or further details.

Imposing taxes on the E-commerce business was first discussed in 2003 when online shopping began in China, and at this year’s NPC and CPPCC sessions, this issue was brought up again by Zhang Jindong, chairman of China’s electric chain store Suning. Zhang proposed that the taxation authorities should tax E-commerce businesses, thereby strengthening tax supervision and tackling tax evasion.

It has been reported that relevant departments have already adopted Zhang’s proposal and a 5 percent tax will be levied on online shop owners within this year.

“The MOC believes that the regulated development of the E-commerce industry is the top priority for the industry and is now taking the lead in drafting the E-commerce Business Promotion Regulations,” added Yao.

China’s blossoming E-commerce market enjoyed a staggering surge in growth in 2012, with its total transaction volume exceeding RMB8 trillion for the first time, up 31.7 percent year-on-year. Among which, online retail sales accounted for more than RMB1.3 trillion, representing growth of 67.5 percent from a year earlier. Moreover, the country’s online shopping industry already surpassed Japan’s in 2012 and is expected to overtake that of the United States to become the world’s largest online retail market in 2013.

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