Tax Coordination Challenges and Solutions in the China-ASEAN Free Trade Area under the Digital Economy Context

Abstract

The rise of the digital economy has posed new challenges to traditional international tax rules and systems. As a result, the international community has begun to explore whether unilateral or multilateral adjustments to tax rules are needed. This shift also raises fresh questions for China's trade and economic relations with ASEAN. In the realm of digital economy taxation cooperation between China and ASEAN, it is crucial to address the misalignment between the digital economy and traditional tax systems. Additionally, the risks stemming from adjustments to international digital tax rules must be managed. In order to better promote the cooperation and development between China and ASEAN in the field of digital economy, the following series of measures should be taken: Firstly, China needs to further improve its digital economy tax system to meet the needs of this rapidly developing field. Secondly, the China ASEAN Free Trade Area needs to establish an effective tax arbitration mechanism to resolve potential disputes and disputes. Thirdly, the China ASEAN Free Trade Area needs to create a China ASEAN tax information platform in order to manage tax information and compliance requirements more efficiently. At the same time, it should actively respond to the international action plan on base erosion and profit shifting (BEPS) to ensure that China and ASEAN are aligned with international tax rules. Finally, actively participate in the formulation of international tax rules to ensure that the voices of China and ASEAN in this area are fully heard and considered. These measures will help address the challenges posed by the digital economy and promote the smooth development of China-ASEAN cooperation in the digital economy.