Beijing to mend loophole in tax evasion of online shops
3/7/2008 17:20
The Beijing municipal government announced in Beijing today it would
require all individuals or vendors doing online businesses to register and pay
taxes on their transactions.
The Beijing Administration for Industry and
Commerce (BAIC) said on its website, www.baic.gov.cn, that all corporate
entities or individuals who do online businesses have to register with the
administration starting Aug. 1, something which makes profit from their online
businesses taxable. The only exception is for people who sell or swap personal
goods not for profit.
Online businesses, particularly those of small groups
or individuals, have long been ignored for taxation. In recent years, a number
of online shops were opened, with sales ranging from cosmetics, watches,
consumer electronics, luxury bags, brand clothes and child-care products, among
others.
Most products were imported but enjoyed price advantages over
registered merchants due to lower costs without taxation, thus were welcomed by
fashionable but budget-conscious customers.
A BAIC official Wang Jing said
the administration did not clarify what "personal goods" or "goods for personal
use" were. "We don't want to impose too strict rules on online activities in
order to keep those activities as vibrant as possible."
"Any disputes on
goods for personal use or business not for profits should be judged by courts or
arbitration authorities."
The BAIC also held websites accountable for
checking the business certification of online sellers. Online business websites
were required to keep transaction records for at least two years. Any negligence
of uncertified businesses would risk fines for responsible websites ranging from
20,000 yuan (US$2,900) to 500,000 yuan.
Xinhua
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