South Africa updates

Corporate Tax

Contributed by Cliffe Dekker Hofmeyr
Davis Tax Committee releases final reports
  • South Africa
  • June 15 2018

The Davis Tax Committee (DTC) recently issued a media statement announcing the publication of four additional final reports and the conclusion of its work based on its terms of reference. The closing report on the work done by the DTC states that the 12 sub-committees consulted widely and that a number of themes emerged from the consultations with various stakeholders. The closing report also mentions some of the challenges faced by the DTC.

Raising jurisdictional issues
  • South Africa
  • June 08 2018

The focus of a recent Supreme Court of Appeal case was not the merits of the dispute between the parties, but rather the correctness of the procedure that the taxpayer had followed in its appeal to the Tax Court. The Supreme Court of Appeal held that determining whether the Tax Court's decision was appealable was contingent on whether the decision was one contemplated in the Tax Administration Act.

Status of SARS interpretation notes
  • South Africa
  • June 01 2018

A recent Supreme Court of Appeal judgment referred with approval to certain sections of a South African Revenue Service (SARS) interpretation note. The taxpayer appealed to the Constitutional Court, which held that the courts should not have regard to SARS interpretation notes when interpreting legislation, but may do so where SARS's practice is evidenced by an interpretation note which has been recognised by SARS and the taxpayer.

SARS speaks up: clarity provided on taxation of cryptocurrencies
  • South Africa
  • May 25 2018

The South African Revenue Service (SARS) recently announced that it will continue to apply normal income tax rules to cryptocurrencies and expects affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income. Due to the growing popularity of cryptocurrencies in South Africa and the absence of legislation concerning their taxation and regulation, SARS's decision to address this issue was widely anticipated.

Tax treatment of doubtful debts to be clarified through statutory amendments
  • South Africa
  • May 18 2018

In line with the removal of the remnants of the administrative assessment system in 2015, the South African Revenue Services commissioner's discretion in respect of the doubtful debt allowance was to be deleted from the Income Tax Act. The intention behind this deletion was that, in future, the allowance would be claimed according to certain criteria set out in a public notice. However, according to the recent budget, it is now proposed that the criteria for determining the allowance be included in the act.


Healthcare & Life Sciences

Contributed by Edward Nathan Sonnenbergs Inc
Focus on healthcare and life sciences legislation: Genetically Modified Organisms Act
  • South Africa
  • June 06 2018

The Genetically Modified Organisms (GMO) Act provides the requirements to ensure the responsible development, production, use and application of GMOs. Any entity or person planning to perform a regulated activity under the act must prepare an application to the registrar and pay the application fee. Regulated activities include activities involving genetic modification, the experimental or trial release of a GMO, the contained use of a GMO and the general release of or commodity clearance regarding a GMO.

Biopharming: new frontier for affordable medicines
  • South Africa
  • April 11 2018

The South African government has focused on biopharming as a means of developing the bioeconomy for more than a decade. In addition, different government departments have already implemented legislation concerning plant-based protein production. Given this infrastructure and the highly active local biopharming research community, South Africa is considered a promising jurisdiction for the production of plant-based therapeutic proteins, with many possible opportunities for investment and collaboration.

Medical products: incentives regulation reloaded
  • South Africa
  • February 14 2018

The South African minister of health has called for public comment on the recently published Draft General Regulations Relating to Bonusing. The draft regulations aim to flesh out Section 18A of the Medicines Act, which prohibits the supply of any medicine, medical device or in vitro diagnostic medical device that is subject to a bonus system, rebate system or any other incentive scheme.

Draft IP Policy Phase 1 – part two: access to medicines, state 'walk-in' rights and parallel import
  • South Africa
  • December 06 2017

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.

Draft IP Policy Phase 1: access to medicines and compulsory licensing
  • South Africa
  • October 11 2017

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.


Intellectual Property

Contributed by KISCH IP
Copyright: the unregistrable, the forgotten and the mighty
  • South Africa
  • June 18 2018

A saga spanning more than five years finally came to an end when all disputes between the Agricultural Research Council (ARC) and the South African and Animal Improvement Association were settled. Underpinning the conclusion of this saga is a healthy dose of respect for copyright – the unregistrable, often forgotten, yet mighty IP right. The ARC was vindicated in the settlement and its contribution to livestock improvement over many decades was finally given the recognition that it deserves.

How can I copyright my idea?
  • South Africa
  • June 11 2018

IP attorneys frequently hear from clients that want to copyright their ideas. However, copyright protection extends only to the material expression of an idea and not the idea, concept, procedure or method itself. This distinction between ideas and expressions has been the cause of much debate and even confusion; some authors argue that an idea cannot exist independently of its material expression, while others insist that the two are distinct.

Beware – fake news! Increase in sale of counterfeit goods on social media
  • South Africa
  • June 04 2018

The increase of internet usage on mobile smartphones has resulted in more than two-thirds of South Africa's population having access to social media. While social media can be regarded as a vital tool for marketing goods and services, many brand owners fail to identify its use as an area of concern for the sale of counterfeit goods online. With much more anonymity and far less red tape, counterfeiters are exploiting social media platforms as a tool for reaching unsuspecting consumers.

When is a descriptive mark not a descriptive mark?
  • South Africa
  • May 07 2018

In a recent appeal against a decision to uphold an opposition against the registration of the trademark PEPPAMATES in view of the registered trademark PEPPADEW, the Supreme Court of Appeal had to consider when a descriptive mark is not a descriptive mark. The Supreme Court of Appeal's judgment has confirmed that where the prefix or first element of a word is in common use, the suffix or last element can be the distinctive element for trademark purposes.

Stay app-dated
  • South Africa
  • January 29 2018

Apps have become increasingly popular owing to users' desire to stay in touch with rapidly developing technology-driven content and services dissemination. They have been created to satisfy just about any need, from gaming to fitness, transport to live updates and shopping to socialising – whatever you require is out there at the tap of a button. However, before releasing an app, IP considerations must be taken into account.


Media, Marketing, Sports & Entertainment

Lights, camera, action! Tax exemption for films
  • South Africa
  • October 26 2017

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.


Real Estate

Residential property developers face cash-flow crunch due to VAT on temporary letting of units
  • South Africa
  • April 06 2018

Many residential property developers will begin 2018 with a major cash-flow challenge, as they may be faced with a substantial value added tax (VAT) liability in respect of the temporary letting of residential units which have been developed for resale. It is hoped that the South African Revenue Service and the National Treasury will urgently address the problems with regard to the VAT rules concerning the change-in-use adjustments for property developers.