South African Income Tax implications of income earned in virtual worlds

There has been a significant increase in the number of internet business and e-commerce transactions being entered into over the last couple of years. More recently, the development of virtual worlds on the internet has become a more important feature of the environment businesses operate in. Although the tax consequences of income earned in virtual worlds have been researched in the United States of America before, no research of this kind exists within South Africa. This study extends prior research by performing a critical analysis of the tax treatment from a South African tax perspective. The study’s specific aim was to determine whether income earned by South African residents from structured and unstructured virtual worlds respectively, would qualify as gross income according to the South African Income Tax Act 58 of 1962. The study builds on previous international research performed, but provides a new perspective from a South African point of view. From a theoretical perspective, the study will make a valuable contribution to the application of basic principles of gross income but on a brand new concept which did not exist when the principles were laid down. The study was limited to determine whether the income earned in virtual worlds by South African residents who are taxed on their world wide income, will be included in gross income as defined by the South African Income Tax Act. Capital gains tax consequences were not considered for any transaction where the income was classified to be of a capital nature. The study did not consider which deductions might be available to taxpayers in terms of the income being included in gross income and no detailed discussion were included to determine when a taxpayer would only be considered to engage in virtual worlds as a hobby versus when the taxpayer’s action would constitute a business. Future research can be extended to this very area. This research concluded that most transactions in virtual worlds resulting in income will qualify as gross income under the South African Income Tax Act. At this stage the only possible disqualification in terms of the South African gross income definition appears to be the qualification of income received as, “of a capital nature”. CopyrightDissertation (MCom)--University of Pretoria, 2009.Taxationunrestricte

Antecedents influencing rugby migration in South Africa

This study set out to determine the most important antecedents influencing the decision of players at the top five South African rugby unions to play overseas. A literature review was conducted in order to establish the theory base for the study. A survey, utilizing a self-administered questionnaire, of players at the top five South African rugby unions was conducted to determine the antecedents influencing the migration decision. The study noted financial reasons as the main antecedent in the decision to migrate. Based on players’ opinions, any strategy devised by the rugby unions to address the problem of player migration would have to focus on a number of facets rather than on one single area of concern.http://www.cluteinstitute.com/am201

Fat Tax as an alternative Tax in South Africa

South Africa, like many other countries, is struggling with raising levels of obesity and the resultant health problems. Furthermore, as elsewhere in the world, this country is experiencing an ever-increasing need for additional fiscal revenue. These problems force governments all over the world to investigate possible solutions to these issues. The aim of this study was to determine whether fat tax can be used as a tool to decrease the rising rate of obesity in South Africa and thus improve the general health of South Africans and to create additional tax revenue. Available literature was compared and critically analyzed in terms of South African conditions in order to determine whether fat tax should be considered as an alternative tax in South Africa. Cultural beliefs that see obesity as a sign of good health and prosperity, as well as the extreme poverty experienced by a large proportion of the populace are factors that make it difficult to compare the findings of studies conducted in the rest of the world to those of South African research. These are aspects that should be considered for further research. Fat tax has potential as an alternative tax in order to bring about behavioural change and create revenue; however, this should be done with careful consideration as to whether the benefits outweigh the cost of its implementation for the South African taxpayer.http://journals.cluteonline.com/index.php/IBERam2013ff201

Value-added tax on virtual world transactions : a South African perspective

The dawn of the internet age has brought about concepts such as electronic commerce, virtual worlds and digitized products. When consumption tax laws such as value-added tax (VAT) or goods and service tax (GST) were legislated, these concepts were not envisaged. The aim of this article is to determine whether the South African value-added tax (VAT) Act is applicable to transactions occurring in virtual worlds. The article critically analyses section 7(1) of the VAT Act to determine its applicability to transactions occurring in virtual worlds. The benefit of this article will be to highlight the deficiency in the South African VAT Act in dealing with electronic commerce transactions as well as transactions arising in virtual worlds. The study reported here concluded that the South African VAT Act in its current format does not appear to deal with transactions occurring in virtual worlds effectively. Consequently, amendments to existing law should be effected in order to deal effectively with the transactions.http://www.cluteinstitute.com/am201

South African income tax implications for income earned in virtual worlds

There has been a significant increase in the number of internet business and e-commerce transactions over the last few years. More recently, the development of virtual worlds on the internet has become an important feature of the business environment. Although some research has been conducted in the United States of America into the tax consequences of income earned in virtual worlds, no such research has been conducted in South Africa. This study adds to the American research by providing a critical analysis of the topic from the South African tax perspective. The specific aim of the study was to determine whether income earned by South African residents from structured and unstructured virtual worlds respectively would qualify as gross income in terms of the South African Income Tax Act 58 of 1962. It builds on previous international research, but offers a new perspective from the South African point of view. The study will make a valuable theoretical contribution to the application of the basic principles of gross income, and will deal with a brand new concept which did not exist when the principles were laid down. The research was limited to determining whether the income earned in virtual worlds by South African residents who are taxed on their world-wide income would be included in gross income as defined by the South African Income Tax Act. Capital gains tax consequences were not considered in any transaction where the income was classified as being of a capital nature. Also excluded were deductions available to taxpayers in terms of the income included in gross income, and there is no detailed discussion on when a taxpayer would be regarded as engaging in virtual worlds as a hobby as opposed to conducting a business. Future research could be extended to this particular area. This research concluded that most transactions in virtual worlds resulting in income would qualify as gross income under the South African Income Tax Act. At this stage, the only possible disqualification in terms of the South African gross income definition appears to be income received "of a capital nature"