ARTICLE · 07 MAY 2015

New Tax Rules Proposed For E-Commerce Transactions

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In the 2015 Budget Speech presented to the National Assembly on 25 February 2015 the Minister of Finance announced that amendments will be proposed to change the rules for the digital economy...

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In the 2015 Budget Speech presented to the National Assembly on 25 February 2015 the Minister of Finance announced that amendments will be proposed to change the rules for the digital economy in line with the latest guidance issued by the Organisation for Economic Co-operation and Development ("OECD") in its report on base erosion and profit shifting ("BEPS").

The changes proposed for South Africa are based on the interim report of the Davis Committee (the "Report") which submitted that there is limited scope for South African residents to shift profits to offshore tax haven jurisdictions via e-commerce transactions, however, the opposite holds true with respect to e-commerce transactions conducted by non-residents with South African customers.

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