International direct taxation of electronic commerce

Abstract

Electronic commerce is a relatively recent phenomenon, and several changes arising from electronic commerce are currently seriously challenging tax authorities - these include, inter alia, a globalised customer base, the transition from paper to virtual transactions, the transition from physical to digitised products and the possibility of conducting business through a server in the source country or elsewhere. This thesis is aimed at identifying the principles upon which the direct taxation of electronic commerce is based. This involves an examination of the work currently being carried out globally, both by the OECD and by various jurisdictions, in order to apply traditional direct taxation principles to electronic commerce, in particular permanent establishment, characterisation and attribution of income. Finally, the conclusion will attempt to identify probable future developments and challenges and perhaps suggest possible solutions.