Latest updates

Court clarifies impact of 'business rescue' regime on admiralty matters
Bowmans
  • Shipping & Transport
  • South Africa
  • June 20 2018

The promulgation of the Companies Act 2008 saw the introduction of a company rehabilitation process termed 'business rescue'. As in many other jurisdictions, a company under business rescue enjoys a temporary moratorium on the prosecution of claims with a view to allowing the distressed company breathing space to reverse its financial difficulties and avoid full-scale liquidation. Against this background, admiralty matters have enjoyed special treatment in the context of claims against insolvent companies.

Copyright: the unregistrable, the forgotten and the mighty
KISCH IP
  • Intellectual Property
  • 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.

Davis Tax Committee releases final reports
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • 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.

How can I copyright my idea?
KISCH IP
  • Intellectual Property
  • 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.

Raising jurisdictional issues
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • 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.

Focus on healthcare and life sciences legislation: Genetically Modified Organisms Act
Edward Nathan Sonnenbergs Inc
  • Healthcare & Life Sciences
  • 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.

Beware – fake news! Increase in sale of counterfeit goods on social media
KISCH IP
  • Intellectual Property
  • 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.

Status of SARS interpretation notes
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • 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
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • 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
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • 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.

Tax rate adjustments
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • South Africa
  • May 11 2018

​Although an increase of 1% in the value added tax rate was announced in the budget in February 2018, no adjustments have been made to the top four income tax brackets. Rather, below-inflation adjustments to the bottom three income tax brackets were announced. It was also announced that the primary, secondary and tertiary rebates will be partially adjusted to account for inflation.

When is a descriptive mark not a descriptive mark?
KISCH IP
  • Intellectual Property
  • 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.

VAT increase: what rate should be charged?
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • South Africa
  • May 04 2018

The minister of finance recently announced that the standard rate of value added tax (VAT) will increase from the current rate of 14% to 15% from April 2018. Unfortunately, the date of introduction of the new rate leaves vendors little time to amend their systems and implement procedures to ensure that VAT is correctly accounted for from that date. There is also uncertainty as to when supplies still qualify for VAT at 14% and when VAT should be levied at 15%.

SARS issues new Guide to Understatement Penalties – a move towards greater certainty?
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • South Africa
  • April 27 2018

One of the key changes to the tax administration regime following the Tax Administration Act's promulgation in 2012 was the conversion from the so-called 'additional tax' regime to the understatement penalty regime. While this shift towards greater certainty has been welcomed, a key challenge remains as the new regime's criteria are open to differing interpretations. In this regard, the South African Revenue Service recently published its Guide to Understatement Penalties.

Recent developments in PBO arena
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • South Africa
  • April 20 2018

The South African Revenue Service (SARS) recently issued a press release regarding its intention to investigate possible tax non-compliance in the religious sector. According to SARS, the investigation is in response to, among other things, general reports which have suggested that certain religious organisations and leaders are contravening tax laws and enriching themselves at the expense of tax compliance and their altruistic and philanthropic purpose.

Biopharming: new frontier for affordable medicines
ENSafrica
  • Healthcare & Life Sciences
  • 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.

Residential property developers face cash-flow crunch due to VAT on temporary letting of units
  • Real Estate
  • 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.

Consecutive asset-for-share transactions
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • South Africa
  • April 06 2018

Section 42 of the Income Tax Act allows taxpayers to transfer assets to a company free of immediate tax consequences, provided that certain requirements are met (ie, there is a roll over for tax purposes). However, certain anti-avoidance provisions may be triggered if the company that acquired the assets disposes of them within 18 months of acquisition. The South African Revenue Service recently provided some guidance on this matter in a binding private ruling.

Did the punishment fit the crime? Tax Court reduces understatement penalty imposed by SARS
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • South Africa
  • March 30 2018

The imposition of understatement penalties under Chapter 16 of the Tax Administration Act, and the factors to consider when imposing such a penalty, is an issue unresolved by the courts. However, a recent Tax Court judgment has set out some helpful principles in this regard.

Taxation of subsistence allowances – SARS issues new ruling
Cliffe Dekker Hofmeyr
  • Corporate Tax
  • South Africa
  • March 23 2018

The South African Revenue Service recently issued Binding Private Ruling 291, which addresses the taxation of subsistence allowances paid by employers to their employees in certain circumstances. The ruling appears to offer guidance regarding the application of Section 8 of the Income Tax Act and suggests that employers may have some leeway in structuring the subsistence allowances that they provide to their employees.