Original Research
Cloud computing activities: South African normal tax source determination
Journal of Economic and Financial Sciences | Vol 9, No 2 | a57 |
DOI: https://doi.org/10.4102/jef.v9i2.57
| © 2017 Rudie Nel, Shene Steenkamp
| This work is licensed under CC Attribution 4.0
Submitted: 18 December 2017 | Published: 11 August 2016
Submitted: 18 December 2017 | Published: 11 August 2016
About the author(s)
Rudie Nel, School of Accountancy, Stellenbosch University, South AfricaShene Steenkamp, School of Accountancy, Stellenbosch University, South Africa
Full Text:
PDF (237KB)Abstract
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.
Keywords
Source rules; cloud-computing; originating cause; section 9; income tax
Metrics
Total abstract views: 2173Total article views: 934