Foreword

Welcome to this collection of articles from the Hong Kong Institute of Certified Public Accountants’ monthly magazine A Plus in 2020, contributed by or featuring members of the Institute’s Taxation Faculty. The theme of the yearbook, Preparing for a more taxing future, is demonstrated through the wide coverage in the articles, which also represent the diverse responsibilities of the Taxation Faculty.

The Taxation Faculty brings together the tax activities and programmes run by the Institute. These are primarily the technical, advocacy and liaison work as well as member services such as seminars, networking events, and a regular e-newsletter.

The Taxation Faculty helps raise the profile of the taxation profession in Hong Kong and provides a stronger voice for members working in this field. It also offers a platform for the further development of high-quality tax services under the Institute. The faculty also lends support to other Institute initiatives, such as the advanced diploma in specialist taxation.

The Taxation Faculty welcomes both Institute members and non-members to join. More information about the faculty can be found here.

2020 was a year of disruption due to the COVID-19 pandemic. Most of the world was focused on the task of battling the pandemic, with the attention of governments, businesses and individuals understandably concentrated on the disease, and on impeding its spread and mitigating its impact as much as possible. Governments mobilized unprecedented resources to support their locked-down economies and acquire the equipment and supplies health systems needed and, more recently, the vaccines essential for their populations. Businesses faced disruption to operations and customer demand, and had to adapt to the challenging times. Individuals were locked down, working from home or facing unemployment, or even their own personal battles with the virus.

The pandemic has transformed economies. Coming at a time of continuing digital transformation of the economy, the pandemic has hastened the usage of new technologies, giving an unexpected boost to their providers, and also increased the economic power of the multinational enterprises that control much of the digital economic activity. The question of how governments tax these enterprises, and how businesses structure their activities are growing in importance, especially with the need to eventually pay back all the extra government spending on fighting the pandemic.

This is why the work of the Organization for Cooperation and Development/ G20 Inclusive Framework on Base Erosion and Profit Shifting 2.0 initiative on the tax challenges arising from digitalization is so important. The release of the two blueprints in October 2020 will likely have significant impacts on tax systems across the world, including Hong Kong, and will be a focus of the Taxation Faculty going forward. This yearbook includes a number of articles on the initiative.

Many in the taxation specialization in Hong Kong work advising Mainland-based companies or on Mainland taxation. The yearbook also covers this topic, and how taxation is developing in China.

We hope you enjoy these articles, and continue to read A Plus to keep up to date with the latest developments in in Hong Kong and cross-boundary taxation.