The Tax Court recently issued its decision in a case concerning a taxpayer's claim for R90 million as an expense or loss during the 2007 assessment year, the deduction of which was prohibited by the South African Revenue Service. Among other things, the court had to consider whether the taxpayer had been carrying on the trade of selling coal when it had paid the R90 million and whether the expense had been incurred in the production of income or for trade purposes.
The debt reduction provisions provided for in the Income Tax Act have been the subject of significant debate since their introduction. As a result, the National Treasury included various proposed changes to the provisions in the first draft of the Taxation Laws Amendment Bill 2017. Following consultation on the bill, the National Treasury recently published a revised bill, which contains further significant amendments.
Under the Tax Administration Act, a Tax Court judgment regarding an appeal under the dispute resolution provisions contained in the act must be published for general information purposes. The South African Revenue Service recently published a raft of Tax Court judgments that have thus far been handed down in 2017, which provide for interesting reading and cover a broad range of procedural and administrative issues.
The Tax Court recently addressed the question of whether a taxpayer is entitled to condonation for the late filing of an appeal under the Tax Administration Act. The Tax Court referred to a Constitutional Court judgment which found that a delay cannot be a determining factor in condonation applications. In addition, it noted that other important considerations should be taken into account, such as whether the omission or failure was the applicant's fault and the extent of the delay.
Following the implementation of the Organisation for Economic Cooperation and Development's Base Erosion and Profit Shifting Action Plans, which impose country-by-country reporting requirements on multinational enterprises, taxpayers can no longer – or at least cannot easily – strategically escape taxation by shifting their profits to low or no-tax jurisdictions. This is because the South African Revenue Service has become aware of issues regarding tax avoidance and is actively taking steps to address them.
The recently published Draft IP Policy Phase 1 2017 includes a number of provisions relating to parallel import and state 'walk-in' rights for access to affordable medicines. Although there are complex issues surrounding access to affordable medicines, the inclusive process that the government has used in the implementation of the new policy is encouraging.
The keenly anticipated draft IP Policy Phase 1 (2017) was recently published for public comment. It constitutes the first phase in the implementation of a comprehensive IP policy for South Africa. One of the key issues to be addressed is the interplay between the constitutional rights relating to property and access to healthcare. According to the policy, the scope of compulsory licences will be strengthened and clarified in an effort to facilitate the process of exporting IP goods, such as medicines.
South African pharmaceutical product litigation case law provides no particular test that refers to the doctrine of equivalents. However, when interpreting the scope of patent claims, the courts may hold that a claim extends to obviously substituted equivalents in the infringing product or process that are not literally provided for in the specification and claims. As such, a pharmaceutical product or process with chemical equivalents may also be considered to constitute infringement.
In South Africa, gene editing techniques have and are being used in research studies for therapy with adult human cells. However, the ethical concerns around somatic gene editing therapy are less controversial than with germline therapy. At present, the modification of a human embryo's germline for therapeutic purposes culminating in the reproduction of a human being is prohibited. Germline editing for research purposes might be permitted, but would require conditional ministerial approval.
As online consumer confidence grows in South Africa, the online market is becoming an increasingly attractive space for counterfeiters and fraudsters. Counterfeiting not only affects consumers and brand owners, but can also weaken a country's economy and impact its ability to attract foreign investment. However, consumers have the antidote to counterfeiting and, as such, must make sure to use it.
In recent years, the South African craft beer industry has grown rapidly. Larger commercial beer companies have been heavily affected by this shift in the market and have thus started to acquire craft breweries. In order to prevent the term 'craft beer' from becoming diluted in the near future, many remaining craft breweries feel that the market should be completely transparent. As such, it is surely only a matter of time before South Africa adopts a certification process to protect the nature of 'true' craft beer.
In order to protect trade secrets, companies should, among other things, require that anyone exposed to trade secrets sign a non-disclosure agreement. Where this party is an employee, a restraint of trade agreement may also be used. However, the courts are reluctant to enforce excessively onerous restraint of trade agreements, as these restrict employees' rights to practise their trade and make a living.
South Africa has an abundance of natural resources and, as a result, a large proportion of patent applications are filed covering a process or apparatus used in the production of a product. In terms of patent law, there is no substantive difference between the patentability requirements for a patent for a product or a patent for a process. However, there are important differences between product and process patents when it comes to enforcement.
Micro-organisms are fast becoming a focus area in South African patent practice. The reason for this is not based on a resurgence of the amount of biological inventions relating to the use of micro-organisms, but rather the complex legislative framework that must be negotiated in order to ensure the validity of a South African patent based on micro-organisms indigenous to the country.
Section 12O of the Income Tax Act provides an incentive to stimulate the domestic production of films in the form of an exemption from normal tax for income derived from the exploitation rights of a film. The South African Revenue Service recently issued guidance reflecting its interpretation of this provision.
The High Court's decision in a recent case involving a protective writ issued by a creditor of Hanjin at the time of the company's collapse was recently appealed before the Supreme Court of Appeal. A number of Hanjin creditors have filed an application for a time extension to serve the writs of arrest pending the outcome of the appeal. In the absence of an extension, the writs will have no further force or effect.
The longstanding practice of issuing a protective writ is directed at preserving the claimant's right to arrest a vessel in rem, notwithstanding a subsequent change of ownership. This matter did not come before the South African courts until recently, when the buyer of a vessel applied to the courts to have the protective writ set aside. The root of the problem lies in the apparent paradoxical Admiralty Jurisdiction Regulation Act provisions relating to the time of commencement of an admiralty action.
In a recent case, the Saharawi Arab Democratic Republic and the Polisario Front successfully applied to the Eastern Cape Local Division of the High Court for an order restraining and prohibiting the owners, master and charterers of the Cherry Blossom vessel, among other parties, from taking a cargo of phosphate out of the court's jurisdiction, pending the determination of the applicants' claim to ownership and delivery of the cargo.
The Department of Transport recently released the long-awaited draft Comprehensive Maritime Transport Policy (CMTP) for public consultation and comment. The CMTP aims to facilitate the revival, development and transformation of South Africa's maritime transport sector, in order to enhance its contribution to international trade and the development of the South African economy.
The existing state of the shipping market has led to an environment characterised by low to moderate value maritime claims coupled with high legal enforcement costs in relation to value. In many cases, this has left claims managers uncertain as to whether they should pursue debtors. South Africa is one of the few admiralty jurisdictions which offers an opportunity for maritime claimants to gain an advantage by obtaining security for claims before having to commence legal proceedings.