Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962

 

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dc.contributor.advisor Davis, Dennis en_ZA
dc.contributor.author Nkerebuka, Eliya John en_ZA
dc.date.accessioned 2016-05-23T11:10:25Z
dc.date.available 2016-05-23T11:10:25Z
dc.date.issued 2015 en_ZA
dc.identifier.citation Nkerebuka, E. 2015. Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962. University of Cape Town. en_ZA
dc.identifier.uri http://hdl.handle.net/11427/19790
dc.description.abstract The right to tax is traditionally based on connection to jurisdiction. Taxation is divided into international and domestic systems. An international tax system subjects its residents to tax on their income from all around the world while a domestic tax system subjects its residents to tax only on income arising out of a source within the borders of such a State. Under the international tax system, a State's right to tax firstly depends on whether the taxpayer deriving the said taxable income is a resident of that country or not. With respect to an entity or enterprise, its place of effective management or its headquarters within a State is used to establish residence of such an entity in the State hence making the entity taxable. Where the enterprise does not have a place of effective management or headquarters in a State, hence rendering such enterprise a non-resident, treaty rules have established that the permanent establishment concept be used to tax business profits. The permanent establishment becomes the minimum criteria for establishing that such an enterprise has an economic presence within the borders of the source State. In the presence of an enterprise having cross-border transactions, it is possible for the enterprise to be subject to taxable under both the domestic tax system of the State within which it is a resident as well as under the international tax system of the source State within which it has a permanent establishment, thus arising the question of double taxation. To help solve such a situation, legal instruments, arising in the form of tax treaties were created to combat double taxation of income arising out of cross-border transactions. Integral in solving this situation is the concept of permanent establishment. The permanent establishment is a source rule; thus a basic requirement to be met before business profits of a non-resident that are attributable to its permanent establishment in the source State are taxed in that State. However, technology developments and the rise of electronic commerce are rising problems on the application of the permanent establishment concept in relation to taxing income from international sources of such businesses.3 The broad meaning of the permanent establishment concept, particularly its requirements, make it difficult and ambiguous during its application to enterprises that conduct their businesses electronically or via the internet. en_ZA
dc.language.iso eng en_ZA
dc.subject.other Tax Law en_ZA
dc.title Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962 en_ZA
dc.type Master Thesis
uct.type.publication Research en_ZA
uct.type.resource Thesis en_ZA
dc.publisher.institution University of Cape Town
dc.publisher.faculty Faculty of Law en_ZA
dc.publisher.department Department of Commercial Law en_ZA
dc.type.qualificationlevel Masters
dc.type.qualificationname LLM en_ZA
uct.type.filetype Text
uct.type.filetype Image
dc.identifier.apacitation Nkerebuka, E. J. (2015). <i>Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962</i>. (Thesis). University of Cape Town ,Faculty of Law ,Department of Commercial Law. Retrieved from http://hdl.handle.net/11427/19790 en_ZA
dc.identifier.chicagocitation Nkerebuka, Eliya John. <i>"Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962."</i> Thesis., University of Cape Town ,Faculty of Law ,Department of Commercial Law, 2015. http://hdl.handle.net/11427/19790 en_ZA
dc.identifier.vancouvercitation Nkerebuka EJ. Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962. [Thesis]. University of Cape Town ,Faculty of Law ,Department of Commercial Law, 2015 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/19790 en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Nkerebuka, Eliya John AB - The right to tax is traditionally based on connection to jurisdiction. Taxation is divided into international and domestic systems. An international tax system subjects its residents to tax on their income from all around the world while a domestic tax system subjects its residents to tax only on income arising out of a source within the borders of such a State. Under the international tax system, a State's right to tax firstly depends on whether the taxpayer deriving the said taxable income is a resident of that country or not. With respect to an entity or enterprise, its place of effective management or its headquarters within a State is used to establish residence of such an entity in the State hence making the entity taxable. Where the enterprise does not have a place of effective management or headquarters in a State, hence rendering such enterprise a non-resident, treaty rules have established that the permanent establishment concept be used to tax business profits. The permanent establishment becomes the minimum criteria for establishing that such an enterprise has an economic presence within the borders of the source State. In the presence of an enterprise having cross-border transactions, it is possible for the enterprise to be subject to taxable under both the domestic tax system of the State within which it is a resident as well as under the international tax system of the source State within which it has a permanent establishment, thus arising the question of double taxation. To help solve such a situation, legal instruments, arising in the form of tax treaties were created to combat double taxation of income arising out of cross-border transactions. Integral in solving this situation is the concept of permanent establishment. The permanent establishment is a source rule; thus a basic requirement to be met before business profits of a non-resident that are attributable to its permanent establishment in the source State are taxed in that State. However, technology developments and the rise of electronic commerce are rising problems on the application of the permanent establishment concept in relation to taxing income from international sources of such businesses.3 The broad meaning of the permanent establishment concept, particularly its requirements, make it difficult and ambiguous during its application to enterprises that conduct their businesses electronically or via the internet. DA - 2015 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 2015 T1 - Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962 TI - Trading stock : a critical analysis of the application of Section 1 of the Income Tax Act no 58 of 1962 UR - http://hdl.handle.net/11427/19790 ER - en_ZA


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