Taxation of e‐commerce in Hong Kong: applying UK and US experience
Due to the rapid growth of electronic commerce worldwide, the traditional approach of taxing business profits in Hong Kong, a source‐based common law jurisdiction, warrants a close review as to its compatibility with such a modern way of doing business. Although the Inland Revenue Department of Hong Kong has issued its views on the taxation of electronic commerce profits as Departmental Interpretation and Practice Note 39, much of the treatment of such profits follow the conventional wisdom of taxing business profits as set in the source‐based rules. This paper reviews the present situation of taxing profits arising from electronic commerce transactions in Hong Kong and compares it with the cases of the UK and the USA. Problems in formulating water‐tight tax law, accounting standards for intangible assets, and coping with cross‐border fraud, indicate that progress may not be straightforward. Issues as to fairness, and the difficulty of taxing such receipts are raised, followed by recommendations.
A Conceptual Analysis on the Taxation System for Highly Virtual Enterprises
Highly virtual enterprise (HVE) as a new form of business has existed in the cloud for a long time, but its taxation system is far from establishment. This paper analysed the characteristics of a HVE in the cloud environment, suggested the criteria for its tax residency determination, and recommended the framework for accounting, auditing and legislation in New Zealand. It further proposed the network system for monitoring HVE activities and accounting for their website transactions. It also provided deliverables for cloud technology to develop in the future.
Ethics, Law and Computer Hacking
Computer hacking is discussed sequentially with respect to: social and business ethics, fraud legislation, computer misuse legislation and computer controls. Enacting computer‐specific statutes is the approach that is increasingly popular – UK, US and Canadian responses are described. But law can only serve as one plank in prevention and deterrence of hacking, while enforcement will present problems. Computer auditors and security specialists must play a more significant role. Security precautions are summarised.