Qifeng Yang, Jun Wang, Ping Song,Xuan Ma Wuhan university of technology

The Method of Tax Collection and Technical Realization Based on the Third-Party Online Payment Mode

Introduction

The third-party online payment mode

The method of tax collection of the third- party online payment mode

Part 1

Part 2

Part 3

The structure of the article

Technology realization of tax collection of the third-party online paymentTechnology realization of tax collection of the third-party online payment

Part 4

Part 5 Conclusion

1 Introduction

the reason of tax evasion of online payment: (1) The characteristics of e-commerce make it hard to be monitored;

(2) The law about e-commerce tax is imperfect and all countries don’t have a common view about the tax problem of e-commerce;

(3) The administration of the tax of e-commerce is chaotic;

(4) The methods of tax collection and regulatory technical fall behind and the tax management system fail to achieve network connection with

e-commerce transactions and online payment system 。

2 The third-party online payment mode 2.1 Topology of the Third-Party Online Payment

Mode

Network of financial

professionalsThe modernization of

China's national payment system

Industrial and Commercial Bank of China

Business processing systems of bank counter

Net Bank payment gateway

Front-end

China Construction Bank

Business processing systems of bank counter

Net Bank payment gateway

Front-end

seller

Internet

buyer

the third-party payment platform

Registration

Bookkeeping system

2 The third-party online payment mode 2.2 Process of the Third-Party Online Payment Mode

(1) transactions consultations

(6)confirm receive

Transfer, query

(5)delivery

receive money, query

buyer’s bank seller’s bank

(2)payment information

(6)confirm receive

(3)withholding money

(4)inform delivery

(7)transfer

buyer seller

CNAPS

third-party Payment platform

3 The method of tax collection of the third-party online payment mode

3.1Bank Withholding Tax Method

the third-party online payment

platform

Inland Revenue tax

system

commercial banks withholding tax

transmit transaction information

send e-tax receipts

Taxpayer (seller)

E-tax receiptsthe third-party online payment platform for

withholding tax

IR’ s virtual account on the third-

party platform

IR bank account

taxpayer (seller)

Tax deduction

tax materials

E-tax receipts

transfer of virtual money

Inland Revenue tax

system

E-tax receipts

3.2 The Third-Party Withholding Tax Method

4 Technology realization of tax collection of the third-party online payment

the liquidation of the third-party online payment mode

The liquidation way of the third-party online payment mode is “secondary settlement” and the process includes three stages: pre-transaction phase, the transaction phase and

post-transaction phase.

tax collection and management flow chart of the third-party online payment mode

database flow chart of tax collection and management of the third-party online payment mode

seller negotiate with buyer, make orders

buyer transmits order and account information to the third-party

payment platform

the buyer account balance is enough or not

YES

money was transferredfrom the buyer's virtual account to the third-party current accounts

the third-party platformnotice the seller to delivery

the buyer confirm receiving

the buyer sends payment instructions to the third payment

platform

satisfy or not

YES

money was transferred from the third-party current accounts to

the seller's virtual account

the third-party platform sends seller’ s information

to the regulation center of IRD

verify seller’ s entity qualification

pass

the third-party inform the taxpayer (the seller)

to pay taxes

Seller fill the material and sent to the third-party

payment platform

third-party deduct tax to the virtual account of IRD

the third-party inform the IRD tax has been received

IRD send electronic receipt to the taxpayer

through a third party platform

banks implement of liquidation to the seller, the IRD

through the third-party platform

End transaction

NO

apply for refundsto the third-party

platform

NOprompt account recharge

apply for entity

qualification

not

Tax Collection and Management Flow Chart of the Third-Party Online Payment Mode

Database Flow Chart of Tax Collection and Management of the Third-Party Online Payment Mode Buyer’ s account

master file table

seller’ s account

master file table

transaction flow

table

Buyer’ s account

master file table

breakdown table(buyer)

temporary table

seller’ s account

master file table

breakdown table(seller)

Tax collection

information table

breakdown table(IRD)

accordrecorded condition or not

breakdown table(buyer)

Buyer’ s account

master file table transaction ending

YES

NO

The first settlement： Debit: buyer's virtual account m

Credit: third party's current account m

The second settlement： Debit: the third-party's current account m Credit: seller's virtual account m

5 Conclusion

It analyzes the reasons of the tax evasion of online payment and introduces the third-party online payment mode;

It designs two methods of tax collection based on the third-party online payment mode ---banking withholding tax method and the third-party withholding tax method;

Aim to the third-party withholding tax method it designs the technical realization including liquidation process 、 tax collection and management flow chart 、 database flow chart 。

Acknowledgement

This research was supported by the Ministry of Educational of the People's Republic of China in Humanities and Social Sciences Planning Fund:

(1)Research on Leading Mode of Online Payment and Its Innovation Service, under Grant 07JA630028.

(2)Research on Online Payment Collaborative Management Mode , under Grant 08JA630064.

Thanks for your attention ！