EFA Annual Conference gathers speed.
The EFA annual conference will be held in Deloitte’s conference centre in Cape Town on 27 October. We look forward to welcoming you all there!
Professor Deborah Tickle (Partner, Global International Corporate Tax and Transfer Pricing Services, KPMG Inc/ KPMG Services), who is a member of the Davis Commission on Tax in South Africa, will be joining us to share in the views of the Davis Commission on the taxation of ecommerce and the digital economy.
An email is being sent to all those who receive the EFA Newsletter, inviting you to attend on the 27 October. We look forward to seeing you then.
The Davis Commission on Tax
The Davis Commission on Tax has informed EFA that it is completing its report on the digital economy and ecommerce and hopes to have it published by late September. The Commission invited EFA in October last year to provide the views of ecommerce. We were not even launched at that stage, however we gave initial views, followed in the Autumn with a second paper and opportunity to give evidence to the Commission. These papers are available on our website www.ecomafrica.org.
The Commission was particularly interested to hear our views on the OECD guidelines for ecommerce, known as BETS. South Africa is guided by this agreement as a member of the G20 countries. G20 committed to follow the OECD’s lead, however, as we pointed out to the Davis Commission, as a developing economy we have greater challenges to introduce and establish ecommerce than the developed economies of Western Europe, like Germany, France or the UK.
In particular, we strongly criticized the rule by SARS that requires a foreign company selling at a distance into SA to register itself at SARS once its annual turnover has reached 50,000zar. This, we pointed out, is not only discouraging for foreign etailers, but is very likely to become the model for other African countries which will penalize SA etailers. The turnover rule in Europe is far higher (usually around 500,000zar equivalent). We are hoping the Commission heard us on this, and the other points we made!
And Talking About Tax on Ecommerce Purchases – the latest from the USA
The USA has long been struggling with a workable system to charge the various states’ sales taxes across state lines (one report indicates the states lost over $23 billion in sales tax revenue in 2014). In the past attempts have been made to have the vendors collect the tax, and follow the taxability rules, of the location where the items are being shipped, the destination principle. The destination principle follows the idea that consumption taxes (i.e. sales taxes) should be imposed at the location of consumption; the ship-to location or destination, however the problem is that this puts too heavy a burden on the etailer.
Now Rep Bob Goodlatte (Republican of Virginia) has come up with a radically new approach. As the online report Taxify reports: –
“The proposal allows a state to collect tax on remote sales if:
- It is the origin state of the sale;
- The tax is applied using the origin base (tax rules) applicable to in-state sales; and
- The origin state participates in a “state tax clearinghouse”;
- The tax rate charged is determined by the destination (ship-to) state, and must be a “simplified destination rate” that is the same rate state-wide;
- All taxes collected on these remote sales would be reported and paid to the origin state, and the state would be responsible for distributing the tax revenues amongst all the states through a “State Tax Clearinghouse.”;
- States have the option of joining the Clearinghouse and participating. If they choose not to different rules will apply to sales in those states.
So the sale is taxable in the origin state, using the origin state product taxability rules, but the rate charged is determined by the destination (ship-to) state.”
European Union Completes its Consultation on the Revision of the ePrivacy Directive
The European Commission has completed its online survey on the revision of the ePrivacy Directive. This Directive is of importance to us in SA as it is one of the basis for the Protection of Personal Information Act (POPI).
The two bodies EFA is affiliated to in Europe, Ecommerce Europe and EMOTA, both gave their views on the need for the Directive to be revised. They showed that their members found the differences in national privacy laws were serious barriers to cross border ecommerce. Ecommerce Europe pointed out the the Directive makes it difficult for etailers because of the need for consent. It therefore calls for an opt out regime rather than the existing opt in regime. EMOTA also feels that there is a “consent fatigue” among consumers, but it concentrated its criticism on the fact that the EU has only just adopted its new Data Protection Regulation, which covers everything adequately and therefore there is no need for a further set of regulations.
In SA the Ministry of Justice has at last started to appoint members to the POPI Regulator. There will be 5 members. Once the Regulator is set up it will seek to interpret the POPI Act (which is getting rather long in the tooth, it was signed nearly 3 years ago, in November 2013). It is very likely that the Regulator will be heavily influenced when interpreting POPI by the developments on privacy/data protection at the EU. We are therefore carefully monitoring developments there and will bring you the latest as it evolves.
EFA has a limited number of free entry tickets for the Digital Education Show.
The Digital Education Show Africa will take place from the 18th and 19th of October 2016 at the Sandton Convention Centre Johannesburg, South Africa. The event is Africa’s leading education and technology exhibition. The show helps shape the solutions for the future of technology and education within schools with the key decision makers in Technology and Education that come to talk about the challenges and opportunities within the industry. The Digital Education Show Africa welcomes over 2500 attendees and hosts a mecca of solution providers spanning within 1 exhibition hall across thousands of square meters. The event will give you a fantastic opportunity to listen to the informative and practical seminars to increase your knowledge in the industry as well as network with new businesses.
If you are interested in attending and benefiting from one of the free entry tickets please contact me,firstname.lastname@example.org as soon as possible!
Seamless – Terrapinn’s annual retail, payments and ecommerce conference – 14-15 March 2017
Terrapinn has announced that its annual retail and payments conference, held previously in Sandton, will relocate next year to the Cape Town International Convention Centre, and will give more emphasis to ecommerce.
More details are to be found atwww.terrapinn.co/seamlessafrica
Digitalizing the Industry
As many people point out, the digital economy moves so fast that few books have been written on the subject. The 7th edition of Digitalizing the Industry – Internet of Things Connecting the Physical, Digital and Virtual Worlds, edited by the European Research Cluster on the Internet of Things (IERC) has just been published. Further details from Dr Ovidiu Vermesan of the IERC (Oidiu.Vermesan@sintef.no).