E-COMMERCE EXPLANATORY GLOSSARY
section is designed to explain the ideas and terms
relevant to offshore e-commerce which occur on
the site and may not be immediately understandable
to a non-expert.
Subscriber Line, a technology that allows high
speed use of the Internet down normal telephone
wire; however it works satisfactorily only within
relatively short distances from an exchange.
this is the rate at which information that can travel
along a given communications link, for instance
down the medium (twisted copper pair, cable, wireless
frequency etc) used to connect to the Internet.
See Mbps, Gbps, Tbps.
name for methods of delivering electronic data which
are fast enough (have enough bandwidth/have large
anough pipes) to be used to deliver motion-picture
quality images. Cable can deliver broadband; telephone
lines cannot (at present).
used by the FBI in the US which can 'sniff-out'
suspicious content in protected messages and data-bases
and take copies; may eventually be judged unconstitutional
in its present form.
that a signature or document or transaction on the
Internet is what it says it is; certification is
supplied by Trusted Third Parties or Certification
Authorities who use advanced security features to
ensure that data accompanied by a Certificate cannot
be tampered with.
Foreign Corporation; most high-tax countries have
legislation which compels the repatriation (or equivalent
taxation) of the profits of companies in offshore
jurisdictions if they are substantially owned by
shareholders in the high-tax jurisdiction.
a virtual server, dedicated to one client (one customer-base),
on the same server as is used by the ISP or Internet
host who is providing that client with Internet
money, provided in a secure way by a bank to a customer,
which can then be used electronically to buy products
products, or digital products:
or service that can be delivered electronically,
and specifically over the Internet. For example,
computer software can be downloaded from server
to client; or legal advice can be given in the form
of e-mails and electronic files.
retail presence on the Internet, including its catalogue,
selling tools and payment processing tools.
Action Task Force, an action group set up by the
OECD (qv) to attack money-laundering, and which
issued a list of 6 offshore jurisdictions which
it said lacked effective controls on money-laundering.
parts of a commercial operation that face and deal
with the customer.
Stability Forum, an action group set up by the G7
(top nations club) to prevent a recurrence of the
1998 Asian melt-down, and which issued a list of
15 (mostly offshore) jurisdictions which it said
represented a threat to global financial stability.
per second (one billion bytes per second) - a measure
of Bandwidth, ie the capacity of a connection.
User Interface. This is the name for the screens
that people will see when browsing a web site.
Service Provider (ISP - see below) who also offers
hosting of Internet domains. Many do, but not all.
Business Company. A type of company offered by many
offshore jurisdictions which gives tax exemption
for international trading companies.
Offshore Financial Centre. Another name for an offshore
financial jurisdiction, or what used to be called
a tax haven.
Protocol. The standardised format used to send packets
of information on the Internet.
Services Digital Network. An ISDN line will give
you a much faster connection to the Internet; it
may come to be replaced by ADSL technology.
Service Provider. A company which offers connection
to the Internet to its clients; it may or may not
offer more complex service.
program that allows two or more computer users to
exchange data securely over the Internet; used by
music buffs for free copying until attacked by the
for Economic Co-operation and Development - a Paris-based
club of 27 rich countries which sets informal but
widely-adopted economic standards and which has
attacked 35 offshore jurisdictions for what it calls
'unfair' tax competition.
context of e-commerce offshore means that a site
is situated on a server that is physically located
in an IOFC.
(wires, transmission links, cables, or whatever,
that connect two parts of a network).
bits per second (one million bytes per second).
A measure of bandwidth i.e. the volume of bits of
data that can be transferred per second over a given
(data format) used to allow music to be sent over
in (for instance) a US state, giving rise to a liability
for sales tax.
'open standards'; software which has general applicability
on the Internet and can be used in any application,
as opposed to:
tied to a particular provider, and not necessarily
compatible with any particular other piece of software.
Switched Network - the existing telecommunications
system in a country which routes calls between users.
Internet software and many services are provided
by resellers who buy or license programs or packages
from originators and sell them on.
of Investigatory Powers Act; a contentious piece
of UK legislation which can be used to compel ISPs
to provide decoded copies of encrypted communications
to the Government and which may restrict the growth
of the UK e-commerce.
Music Downloading Initiative. The 'corporate' alternative
to Mp3, being developed by the big recording companies.
that will host a web site, usually on the premises
of an ISP or Web Host; it 'serves' visitors to the
site with pages on request.
called Internet Hotel - a facility which houses
e-commerce or e-business servers belonging to users
in a controlled environment and acts as a communications
hub for them.
that is equipped to handle sensitive details such
as credit card information; thus it must have the
ability to send and receive encrypted information
through the SSL and/or SET protocols.
of the software in an electronic shop that allows
customers to pick up goods as if they were on a
shelf and take them all together to the check-out
Socket Layer and Secure Electronic Transaction respectively.
These two protocols allow encryption between browser
and server, facilitating secure transfer of sensitive
Sales Tax Project; an attempt by about 40 US states
to develop a harmonised sales tax regime in preparation
for imposing effective sales taxes on the Internet.
Presence (UK)/ Permanent Establishment (US):
relates to the law regarding taxation of business
profits. For a country to tax a company's profits
it must usually be first established that the company
is carrying on business in that jurisdiction. This
is done by showing that the company has a 'taxable
presence' in the UK or a 'permanent establishment'
in the US.
per second (One thousand billion bytes per second)
- a measure of Bandwidth, ie the volume of data
that can be transmitted over a given connection.
Company. The companies that supplied basic telecommunications
services; very often, the national PTTs. The distinction
between telcos and other telecommunications providers
is becoming blurred.
level of data volume, 1,000 times greater than gigabyte,
which is in turn 1,000 times greater than a megabyte
(one million bytes), which is in turn 1,000 times
greater than a kilobyte (one thousand bytes).
Added Tax. A tax that applies throughout the value-chain
in the EU and some other jurisdictions, whereas
sales tax jurisdictions (eg the US) apply tax only
at the final stage when a consumer buys a product.
countries levy a tax on various types of payment
leaving their jurisdiction, including interest,
royalties, license payments, and dividends. These
payments are 'withheld', hence, 'withholding taxes'.
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