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Cloud computing activities : South African normal tax source determination

Nel, Rudie ; Steenkamp, Shene (2016)

CITATION: Nel, R. & Steenkamp, S. 2016. Cloud computing activities : South African normal tax source determination. Journal of Economic and Financial Sciences, 9(2):529-544.

The original publication is available at https://jefjournal.org.za

Article

The location-independent nature of cloud-based transactions results in many source-related difficulties for normal tax purposes. This study considered the source determination for each of the possible classifications of cloud-based income (lease, service and royalty income, and/or income from know-how) by performing a doctrinal study based on South African and international literature. This study identified and formulated the challenges in applying traditional source tests in the context of cloud-based transactions. These challenges stem from the potential absence of physical presence of the provider in the country of consumption, in contrast to traditional source tests where physical presence indicate a tax presence; as well as the location-independent nature of cloud-based transactions from the perspective of both the provider and the consumer. The findings of the study suggest that the source determination for cloud-based transactions could be based on the source of the payment or residency of the payer, rather than the physical location.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/103053
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