Electronic commerce is an unconventional market economy that is based on the sophisticated Internet technology. Great changes have taken place because the electronic business brings about profound impacts on a country's taxation system, taxation policy and taxation methods as well. China's ecommerce is still at the initial stage, the analysis of the status and function of electronic business in China's taxation system will be of great meaning for the development of China's electronic commerce, of great importance for the perfection of China's taxation system, and of great help for the formulation of corresponding policies which are important to enhance China's e-commerce development.