oa Meditari : Research Journal of the School of Accounting Sciences - Die effek van die internet op die inwonerbeginsel, soos gedefinieer in Inkomstebelastingwet Nr. 58 van 1962

Volume 10, Issue 1
  • ISSN : 1022-2529



Over the past few years, electronic commerce has gradually grown into what has arguably become the most daunting challenge to date for tax-systems.

Income tax principles have traditionally been based on the existence of some form of physical presence (either residency, source of income or a permanent establishment) in an area of jurisdiction before tax may be levied. The fact that the Internet can provide substantial economic activity in an area of jurisdiction without having a physical presence, requires an interpretation of and/or amendment to international tax principles.
South Africa has adopted the residence principle of taxation with effect from 1 January 2001. The residence principle is more suited to dealing with Internet transactions than is the source principle. The residence principle does, however, require interpretation and/or amendment in the Internet environment. It is in particular the term "place of effective management" that requires interpretation.
Internet transactions are borderless and therefore subject to double-taxation agreements. The Fiscal Committee of the OECD plays a leading and co-ordinating role in the examination of the effect of electronic commerce on taxation. Therefore the challenge with which South Africa is faced, is to develop a taxation policy that is not isolated from its e-commerce partners.

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