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



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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