Abstract
M. Comm.
It is becoming extremely difficult to ignore the Internet. Globally people are using the
Internet to initiate a variety of transactions. These transactions range from the buying and
selling of physical goods to the buying and selling of services. Internet traffic is increasing daily and this suggests that electronic commerce revenues will grow at an alarming rate. Electronic commerce has exploded world-wide, and South Africa is no exception. Internet based business-to-business transactions are growing and are expected to become a major market factor. The continuous development and growth of the Internet is attracting business to bring their goods and services to a global marketplace. Public and private international communication systems open up opportunities for new forms of commercial activities. Electronic commerce has developed rapidly because companies have seen the way in which computerisation, and in particular the Internet, can accelerate business procedures. The Internet is allowing traditional businesses to expand the geographic boundaries in which their products are marketed and is also generating new businesses and ways of doing business. This results in new electronic products and delivery mediums. In a rapidly growing marketplace, national borders are becoming meaningless to the distribution or sale of a company's product or service. These changes in business provide a challenge to tax legislators and advisors. It is no longer easy in many instances to determine whether a company is providing products, the use of intangibles, or services. The development of these new products and services poses a host of issues when applying current taxation laws designed to deal with traditional businesses manufacturing physical goods.