A Study at UoB Proposes Developing Tax Legislation to Include E-Commerce

Sakhir – University of Bahrain – (trainee Mohammed Al-Miari)

March 28, 2022

A Legal study at the University of Bahrain proposed developing tax legislation, to include modern techniques of e-commerce and take advantage of international tax agreements related to avoiding double taxation.

The study, presented by the professor of economics and public finance at the university, Dr. Nazih Abdelmaksood Mabrouk, in a panel discussion at the College of Law entitled “Contemporary Legal Perspectives – Changes and Challenges” recommended development of tax systems and legislation, to keep pace with the updates of electronic commerce on the network, and encourage cooperation between countries to enact standard legalization, to combat international tax evasion in e-commerce.

The findings of the research showed that there are challenges facing imposing tax on e-commerce transactions, most notably of which are how to determine the tax sovereignty of the state, how to evidence transactions and contracts and identify the location of the financier, the challenge of the digital environment itself, and the challenges of accessing electronic books and records as in traditional trade.

Prof. Mabrouk reviewed states’ opinions on imposing tax on electronic commerce, explaining that “There is a trend against imposing tax on e-commerce transactions, or conducting business electronically, led by the major countries exporting goods and services, while there is another trend in favour of imposing tax on buying and selling goods and services online, adopted by the developing countries. Each of them has its own justifications.”

This study is conducted within the context of the steady increase in the volume of electronic commerce and its growing importance and role in the economy as a product of technological development in the modern era.

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