Abstract: In recent years, the rapid development of the cross-border digital economy has brought challenges to traditional systems of international tax laws and rules. Due to the slow progress in the coordination of digital economy taxation led by the OECD and the European Union, countries such as France, the United Kingdom, and Spain took the lead in levying digital services tax, in an effort to lead the formulation of international tax rules and expand their taxation powers to gain more revenue. The legality and rationality of the unilateral measures of digital services tax are questionable, which will pose a threat to China’s digital economy development strategy. Also, it is suspected of violating the principle of non-discrimination in the General Agreement on Trade in Services and the principle of tax neutrality. In addition, it will increase the tax burden of Chinese digital companies and increase data security risks. At present, the scale of China’s digital economy is continuously expanding and its contribution to economic growth is also continuously increasing, which has become a key factor for China to respond to the pressure of the economic downturn. Therefore, China should promote the development of the digital economy and encourage all countries to create an open, fair, just, and non-discriminatory digital development environment. It is not appropriate for China to levy digital services tax in the short term. Instead, China should take measures to help Chinese digital companies eliminate double taxation and actively participate in the negotiation of international tax rules for the digital economy.

Key words: digital services tax, digital economy, international tax rules, principle of tax neutrality, double taxation