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.
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 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.
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.
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.
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.
The National Health Insurance (NHI) scheme, which is set to come into force on 1 January 2026, will centralise the purchasing of healthcare services in a single body established by the government: the National Health Insurance Fund. The proposed link between the NHI scheme's full implementation and the arbitrary date of 1 January 2026 may be irrational considering the risk of the requisite infrastructure not being sufficiently in place by such date.
South Africa is in the process of reviewing all existing IP laws, particularly in the context of access to medicines. It appears that the type of changes to be made in respect of the Bolar exception will relate to whether the narrow exception should be extended and, if so, to what. In particular, it is likely that an early experimental research exclusion will be included, such as for pre-clinical research. It remains to be seen whether South Africa's laws may change to allow stockpiling of generic medicines.
A recent European Court of Justice ruling on the status of organisms obtained by new breeding techniques as genetically modified organisms (GMOs) has again brought the scope of the South African GMOs Act into question. The difficulty with regulating organisms created through such techniques is that these organisms may be indistinguishable from organisms which have naturally evolved.
Cannabis has enjoyed heightened attention following a recent ruling decriminalising the private possession, consumption and cultivation of the plant for recreational purposes. While there have been several positive developments in the promotion of the medical cannabis market in South Africa, the overarching regulatory framework and authorities' current practice remain barriers to entry for prospective local players in the medical cannabis product manufacturing market.
The Biodiversity Act regulates bioprospecting on and biotrade with indigenous biological resources and indigenous genetic resources and the use of traditional knowledge. Although the early years of regulation under the act were stormy and there was much confusion over who needed to apply for permits and what was required from applicants, there is now more certainty as to what is required.
A trademark will not be registered, or can be removed from the register, if it is inherently deceptive or likely to deceive or cause confusion, contrary to law, against good morals or likely to offend anyone. This article provides insight into the contrary to law provision, particularly insofar as it relates to the controversial discussion regarding the partial legalisation of cannabis in South Africa and its impact on trademark law.
Copycat products imported into South Africa often replicate well-known brands. In such cases, an analysis must be undertaken to determine whether the owner of the legitimate well-known brand can sue based on various grounds. In this respect, although word marks are often seen as the most important because they are a brand's primary name, from an enforceability perspective, filing a part mark can help to avoid ambiguity.
Patent protection of living organisms – and the substances derived therefrom – has long been an area of confusion and controversy in South Africa. However, there has been a recent move towards clearer boundaries regarding what constitutes patentable subject matter in relation to living things.
What should a company do when its distributor terminates their supply and distribution contract stating that it is more economical for it to acquire the products from another company? If the first company has a registered patent for the products that the other company is manufacturing, it can institute infringement proceedings. However, the question then becomes against whom should it institute these proceedings: the distributor or the company infringing its patent?
Professional and amateur bakers are often inspired by the extravagant and intricately designed cakes shown on TV shows. However, this begs the question of whether bakers can reproduce these cakes (or at least try to) without getting into trouble. Perhaps surprisingly, the answer is probably no, as these creations may be subject to copyright protection. Therefore, as with all copyright infringement, it is important to be cautious when taking inspiration from other people's creations.
The South African Revenue Service recently published the fourth issue of Interpretation Note 64, which seeks to provide guidance on the application and interpretation of Section 10(1)(e) of the Income Tax Act. With the rising prevalence of complex developments, security estates, shopping centres, wellness compounds and high-rise flats in South Africa, body corporates, homeowners' associations and share block companies are commonplace and clear guidelines as to the taxation of these entities is imperative.
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.