Accounting Q&A · Taxation · Topic 12
Practise 25 questions on digital sales, platform reporting, crypto records and international tax developments. Try each question before opening the answer. The examples use hypothetical amounts and rates. Check the rules for your jurisdiction and tax year before applying them.
Worked example
A platform reports gross sales of 20,000 and deposits 17,800 after fees of 1,200 and refunds of 1,000. Reconcile the report to the ledger before deciding how each amount is treated under the applicable rules.
Key concepts
1. Why do digital businesses face cross-border tax questions?
Sales, staff, platforms and customers can be located in different jurisdictions.
2. What is platform reporting?
Rules requiring covered platforms to collect and report specified seller or transaction information.
3. Does a platform report determine taxable profit?
It provides information. Reconcile it with refunds, costs and applicable tax rules.
4. Why reconcile gross sales to net payouts?
Payouts may already deduct fees, refunds, reserves or taxes.
5. Gross sales are 9,000, fees 700 and refunds 300. What is net payout?
8,000 if there are no other adjustments.
6. What is electronic invoicing?
Creating and exchanging invoice data electronically under a defined format or system.
7. How does e-invoicing differ from emailing a PDF?
Some regimes require structured data and prescribed validation or transmission.
8. What is digital recordkeeping?
Keeping tax records in electronic form under applicable access and retention requirements.
9. What is a digital services tax?
A jurisdiction-specific levy targeting specified digital activities or revenues.
10. Is a digital services tax the same as VAT on online sales?
They can have distinct bases, scopes and filing rules.
Applying the rules
11. What is a marketplace collection rule?
It can require a platform to collect or account for tax on covered transactions.
12. Why check place of supply for digital services?
It can identify the jurisdiction entitled to tax the consumption.
13. What is automatic exchange of information?
Authorities share specified information under applicable agreements and standards.
14. What is the OECD Crypto-Asset Reporting Framework?
An international framework for reporting and exchanging information on covered crypto-asset transactions, subject to implementation.
15. Does exchanging one crypto asset for another have tax implications?
It can trigger a reportable transaction or tax event under local rules.
16. What records should crypto users retain?
Dates, quantities, values, fees, transaction identifiers and evidence of transfers.
17. Why distinguish own-wallet transfers from disposals?
A transfer can move custody without changing ownership. Fees and local rules still need review.
18. What is a global minimum tax in the OECD Pillar Two context?
A set of rules addressing low effective taxation of covered multinational groups.
19. Do all companies fall within Pillar Two?
Scope depends on group size, exclusions and applicable local legislation.
Review questions
20. Why distinguish statutory and effective tax rates?
The effective rate depends on the defined tax numerator and income base.
21. What is country-by-country reporting?
A framework for reporting specified group information by jurisdiction when required.
22. Why check local adoption of an international framework?
Effective dates, implementation and filing rules can differ across jurisdictions.
23. What risk arises when using AI to prepare tax computations?
It may invent rules or mishandle inputs. Verify sources, protect data and review calculations.
24. How should a tax team track changing requirements?
Assign owners and maintain a dated register of jurisdiction, effective date and affected filings.
25. What should a contemporary tax case identify first?
The activity, jurisdictions, reporting period and governing rules before computing amounts.
Official reference for Emerging and Contemporary Tax Issues.