An Investigation into the Feasibility of WTO Members Taxing Digital Goods Imports

With the rise of digital technologies such as big data, artificial intelligence, and cloud computing, digital trade has increasingly transcended the temporal and spatial constraints inherent in traditional trade, emerging as a vital engine for global economic growth. In the digital economy context, traditional tax governance models confront difficulties in regulating tax avoidance practices by digital enterprises that decouple the location of user value creation from that of revenue generation. This has led to a significant imbalance between the profits digital enterprises earn in market countries and their corresponding tax contributions. This paper analyzes the current state of digital taxation in China, further examines the benefits and drawbacks of digital tax collection for different stakeholders, and explores a balanced approach to taxation that accommodates multiple interests. The discussion covers the following aspects: differences between the digital economy and the physical economy, current tax avoidance methods in the digital economy, and inequality issues arising from the tax framework. The paper concludes that a dual and relatively high-threshold regulatory mechanism should be established, and developing countries should be permitted to implement differentiated policies.