n South African Law Journal - Tax and e-commerce : where is the source

Volume 127, Issue 2
  • ISSN : 0258-2503
  • E-ISSN: 1996-2177



The internet has changed the way we do business by dispensing with the physical requirement of being in the country where the business is being conducted. As the principles of tax law are based on the traditional business model, suggestions have been made for the re-evaluation of traditional tax laws and principles so as to apply them to e-commerce. The article explores one aspect of the applicability of the traditional tax laws and principles to e-commerce, namely the application of the current South African jurisprudence of 'source' to the business income of e-commerce enterprises operated through the use of a server or an ISP, where physical presence is not required. The article argues that the traditional source rules as developed by the South African courts, which emphasise the activities and physical presence of the taxpayer, may preclude the possibility of the place of trading and source of income being located on a server.

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