Based on Statista’s Global Retail E-commerce Sales 2014-2023 published on 30 November 2020, retail e-commerce revenue worldwide amounted to US$3.53 trillion in 2019 and are expected to grow to US$6.54 trillion in 2022. In 2021, over 2.14 billion people worldwide are expected to purchase goods and services online, as compared to 1.66 billion global digital buyers in 2016. Further to the above, COVID-19-related lockdown and social distancing measures have caused many new and existing businesses to turn to online channels for distributing/providing their products and services.

Given the “Statement by the OECD/G20 Inclusive Framework on BEPS on the Two-Pillar Approach” that aims to address “Tax Challenges Arising from the Digitalisation of the Economy”, management should learn about the relevant potential tax implications on their e-commerce businesses and how they may be ready for the international tax rules of the 21st century. In particular, the nexus between local physical presence and taxing right is no longer considered pertinent.

If you have or contemplate to set up an e-commerce business and would like to learn more about the relevant tax implications and how exposures may be mitigated, please feel free to connect with us.