South Africa updates
Corporate Tax
Timing of tax on gift cards
- South Africa
- 31 May 2019
The Cape Town Tax Court recently addressed the timing of income tax in relation to retailer gift cards. The court found that a taxpayer had been correct to have included its receipts for unredeemed gift cards as part of its gross income before the Consumer Protection Act came into force. During the case, the counsel for the commissioner of the South African Revenue Service raised an interesting argument – namely, that the act was introduced to protect consumers' rights and not to change the incidence of tax.
Further amendments to VAT e-services regulations enter into force
- South Africa
- 24 May 2019
Revised regulations clarifying the e-services supplied by foreign suppliers to South African consumers which are subject to value added tax were proposed in 2018, which significantly broadened the scope of e-services. In the 2019 Budget Review, the minister of finance announced that further amendments would be made to the e-services regulations to address certain oversights. The regulations came into effect on 1 April 2019.
Preference share funding structures: overview of Companies Act and Income Tax Act provisions
- South Africa
- 17 May 2019
Preference share funding structures are often preferred by banks and other financial institutions because dividends received by certain holders – including banks and other juristic persons – are exempt from income tax. As such, the provisions of the Companies Act and the Income Tax Act must be considered in the context of the outcome which a company wishes to achieve before it settles the terms of a preference share funding structure.
Creature of statute: decision about Tax Court's power to increase understatement penalties
- South Africa
- 10 May 2019
The Supreme Court of Appeal recently ruled on the South African Revenue Service's (SARS's) right to impose understatement penalties on a taxpayer and the quantum thereof. The judgment will be welcomed by taxpayers involved in disputes with SARS regarding understatement penalties, as it reaffirms that the Tax Court cannot, of its own volition, increase an understatement penalty.
Proposed amendments regarding dividend stripping rules in 2019 Budget: further reflection
- South Africa
- 03 May 2019
This article delves into the National Treasury's proposal to address abusive arrangements aimed at avoiding the anti-dividend stripping provisions in the Income Tax Act. It first discusses the history of the amendments, followed by an examination of the anti-dividend stripping provisions and a brief discussion of the National Treasury's proposal in the 2019 Budget.
Environment & Climate Change
National Biodiversity Economy Strategy: opportunities for innovation and investment
- South Africa
- 11 February 2019
In October 2018 the draft National Biodiversity Framework (NBF) was published for public comment. Considering that South Africa is the third most biodiverse country in the world, the government, as custodian of the country's biodiversity, has implemented approximately 30 national strategies, frameworks and systems in the biodiversity sector. The NBF's purpose is to coordinate and align the efforts of the many organisations and persons involved in the complex interplay between these strategies.
Healthcare & Life Sciences
Contributed by ENSafricaBattling COVID-19: mechanisms for access to antiviral products and diagnostics
- South Africa
- 11 November 2020
While the world is in the grip of the deadly COVID-19 pandemic, the patenting of pharmaceutical and biological compositions and the launch of generic products is even more hotly debated than before, particularly in the world's developing and least-developed countries. What mechanisms are available at present to provide for access to medicines and diagnostics?
Genetic information: a new resource to be mined?
- South Africa
- 21 October 2020
Given that humankind originated in Africa, Africans (and South Africans in particular) have significant genetic diversity. As such, there is a potential wealth of genetic information available to be mined. Unfortunately, without effective regulation, the collection and use of African genetic information could result in the unfair exploitation of the donors of this information. Due to the asymmetrical power relationships between donors and users of genetic information, this is a sensitive issue.
Q&A on ABS compliance in South Africa
- South Africa
- 22 July 2020
There has been much debate in recent years as to the effectiveness of access and benefit sharing provisions relating to indigenous biological and genetic resources (IBGRs) and traditional knowledge or indigenous knowledge (IK) as set out in the Convention on Biological Diversity and adapted into local legislation of member countries. This article explores the situation in South Africa, one of the most megadiverse countries in the world with a wealth of IK relating to IBGRs.
Life sciences acquisitions and divestments
- South Africa
- 01 July 2020
To establish a portfolio of investments, BioVentures, South Africa's first niche biotechnology and life sciences venture capital fund, looked for South African start-ups with proprietary technology that gives them a competitive advantage; a large, growing and preferably international market; multiple products and markets rather than a single product and market; and a quality and balanced management team. This article considers these points in more detail to create a checklist for divestiture preparation or asset hunting.
Scheduling change for cannabis
- South Africa
- 24 June 2020
Health Minister Aaron Motsoaledi recently implemented various changes to Schedules 4, 6 and 7 of the Medicines Act in relation to cannabis and its related components. Although amendments to the Drugs and Drug Trafficking Act remain to be seen, the recent changes to the Medicines Act are a step in the right direction and a significant contribution to the rights of adults to cultivate, possess and use cannabis in private.
Intellectual Property
Contributed by Spoor & FisherWine as case study for diverse IP rights
- South Africa
- 23 November 2020
With regard to the IP rights that exist in viticulture and viniculture, winemaking provides a comprehensive case study when unpacking plant breeders' rights, registered designs, patents and trademarks. At each step of the winemaking process, products of the human intellect or creations of the mind are at play. This is exciting, but contains a worthwhile lesson for those developing or manufacturing a product: there are IP rights that come into existence and they may require legal protection.
Product Regulation & Liability
Is the 2020 Cannabis Bill a flower among weeds or a weed among flowers?
ENSafrica- South Africa
- 17 September 2020
The 2020 Cannabis Bill outlines the regulations under which adults may legally cultivate, possess and use cannabis for private use and recreational purposes. The bill also groups cannabis-related offences into four categories, which each carry different penalties. Even though South African adults can legally possess significantly more grams of cannabis than adults in various other countries, the cost of exceeding these amounts is far greater.
