Abstract
M.Comm.
The study deals with the taxation of electronic commerce ("E-Commerce") transactions.
The main focus of the study is to identify and discuss the international income tax
problems that arise from E-Commerce transactions. The impact of E-Commerce on
indirect taxes such as value-added tax and customs and excise duties is also briefly
discussed, as well as the problems and possibilities from a tax administrator's
perspective. No detailed study on the implications of E-Commerce on our source
legislation has yet been conducted in South Africa. This study will therefore be limited to discussions on possible effects of E-Commerce on the current source legislation as at 1998. This document is not intended to provide solutions to the problems identified.
Internationally, no country has, as yet, been brave enough to provide solutions to the
E-Commerce problems. A number of first-world countries, for example the United States and Australia, have done detailed research and studies on the topic, but both countries issued the documents as discussion papers. These countries have, however, made a few statements on the topic, but none of them provide solutions to the problems. For example, the United States have announced a five-year moratorium on taxes on the Internet and issued a statement on the principles to be followed in the E-Commerce environment. The Organisation for Economic Co-operation and Development has also released a discussion paper on the taxation of E-Commerce transactions, but again with no firm solutions. The possible solutions discussed in these discussion papers will be covered separately in this study.