Information technology is a driving factor in the process of globalisation. Improvements in the
early 1990s in computer hardware, software and telecommunications greatly increased people’s
ability to access information. (The Levin Institute, 2013).
Globalisation is not a new concept however the pace of integration of national economies and
markets has substantially increased in recent years (OECD, 2013e: 7). It can be argued that
‘globalisation’ began with Christopher Columbus and Vasco da Gama (O’Rourke and
Williamson, 2000), but the term has only been in existence since the 1960s (Jeffery, 2002).
It can be said that information technology has been the most recent major catalyst for global
integration (The Levin Institute, 2013) which has enabled globalisation to change the way in
which companies do business (PWC, 2013a).
In relation to the globalisation of the world’s economies, the concept of ‘a permanent
establishment’ has gained significant importance worldwide, due to the direct impact on the tax
revenue generated (Nayyar, 2010).
In the current era of cross-border transactions and the increase in international trade and
commerce among nations, there is a continuous movement of human capital across borders. One
of the most significant results of globalisation is the noticeable impact of one country’s domestic
tax policies on the economy of another country. Double taxation has an adverse effect on trade
and services. Taxation of the same income by two or more countries (juridical double taxation)
would constitute an unfair burden on the taxpayer. (Aimurie, 2013). Many countries agree that in
order to eliminate double taxation, a base of clear and predictable international tax rules must be
applied in order to give certainty to both governments and businesses (OECD, 2013e: 7).
Hence the question of taxing rights is created. The possibility of creating a permanent
establishment in a jurisdiction by a company or its employees or an agent arises as well as the
taxing rights of the tax authorities.
This research report will examine the concept of a permanent establishment and its application in
commercial business activities, the building and construction industry and in the activities of an
agent.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/15173 |
| Date | 13 August 2014 |
| Creators | Andreou, Antonia |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | application/pdf |
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