Assurance of functionality of tax in the e‐business world: the Hong Kong experience

Abstract

Electronic business has changed the way of conducting business and raises a number of tax issues and problems internationally. The challenge is for the tax authorities to assure the functionality of tax, including the determination of taxable transactions, taxable quantum and which government has the right to levy tax. The Organization for Economic Co‐operation and Development has played the leading role in the study of taxation issues arising from electronic transactions. The purpose of this paper is to study the tax issues and problems raised by electronic transactions and in particular, its impact on the tax base in Hong Kong. The popular view among many tax authorities is that the current taxing rules are sufficient to deal with Internet trading and that it does not require a fundamental rewriting of international or domestic tax principles even for source‐based jurisdictions like Hong Kong. However, it is important for the Hong Kong tax authority to lead the way on the challenges and the opportunities posed by e‐business in order to assure the functionality of tax in Hong Kong.

Citation

Ho, D., Mak, A. and Wong, B. (2001), "Assurance of functionality of tax in the e‐business world: the Hong Kong experience", Managerial Auditing Journal, Vol. 16 No. 6, pp. 339-346. https://doi.org/10.1108/02686900110395488