South Africa updates

Corporate Tax

Contributed by Cliffe Dekker Hofmeyr
Doubtful debts no longer so doubtful?
  • South Africa
  • 21 September 2018

The draft Taxation Laws Amendment Bill 2018 has proposed a number of significant legislative amendments, including with regard to the allowance for doubtful debts set out in Section 11(j) of the Income Tax Act. The proposed amendments envisage separating the tax treatment of two defined categories of taxpayer – namely, those which use International Financial Reporting Standards 9 for financial reporting purposes and those which do not.

National Treasury includes cryptocurrencies in draft tax legislation
  • South Africa
  • 14 September 2018

The draft Taxation Laws Amendment Bill, which was recently published for public comment, represents a first for South African taxpayers as it introduces legislative provisions regarding cryptocurrencies. The draft bill is indicative of the National Treasury's approach to the tax treatment of cryptocurrencies, with the proposed amendments demonstrating an identifiable impact on cryptocurrency traders at the outset.

Decrypting the law: proposed VAT Act amendments affecting cryptocurrencies
  • South Africa
  • 07 September 2018

The supply of cryptocurrencies can cause administrative difficulties with regard to the value added tax (VAT) system. As such, the former minister of finance recently proposed that the VAT legislation be amended. In the interim, the South African Revenue Service has stated that it will not require persons to register for VAT for the supply of cryptocurrencies until there has been policy clarification in this regard. The exemption of cryptocurrency transactions from VAT is undoubtedly the preferred route.

Re-prioritising of sorts? Proposals on interaction between dividend stripping rules and corporate reorganisations
  • South Africa
  • 31 August 2018

The Explanatory Memorandum on the Taxation Laws Amendment Bill notes that the 2017 amendments to the Income Tax Act which provided that the anti-avoidance rules on dividend stripping override the corporate reorganisation rules may affect some legitimate transactions. As such, a number of amendments have been proposed to remedy this issue.

Reassurance for taxpayers seeking debt relief
  • South Africa
  • 24 August 2018

Given the current economic climate, debt restructuring and relief have increased and thus received concomitant increased attention from the relevant tax and finance authorities. The latest round of proposed tax amendments in this regard attempt to address a number of concerns discussed in the explanatory memorandum on the draft Taxation Laws Amendment Bill.


Healthcare & Life Sciences

Contributed by Edward Nathan Sonnenbergs Inc
Ownership of genetic information and tissue under National Health Act
  • South Africa
  • 08 August 2018

The legal and philosophical issues relating to the concept of ownership of various kinds of human biological material has been hotly debated. This is an emotive topic that requires balancing societal and commercial interests with individuals' rights, such as the constitutional right to bodily and psychological integrity, which includes the right not to be subjected to medical research or scientific experiments without giving informed consent.

Focus on healthcare and life sciences legislation: Genetically Modified Organisms Act
  • South Africa
  • 06 June 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
  • 11 April 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
  • 14 February 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
  • 06 December 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.


Intellectual Property

Contributed by KISCH IP
Does fourth industrial revolution call for sui generis form of IP protection?
  • South Africa
  • 24 September 2018

The so-called 'fourth industrial revolution' is in full swing. Fields such as artificial intelligence and additive manufacturing are no longer a thing of the future, but rather an increasing part of everyday life in the form of smart devices, driverless cars and automated assistants. However, it is unclear whether South African IP law is equipped to keep up with the rapid technological developments driving this revolution.

Inventorship: not always so patently clear
  • South Africa
  • 10 September 2018

Patent applications may be filed in the names of multiple joint inventors or co-inventors. All cited inventors must have contributed to the invention, although not necessarily in equal parts. To date, the South African courts have not had to deal with the question of what such a contribution entails, but it is generally considered that each contribution must consist of an inventive step which is not merely imparting knowledge that is known in the art.

Who owns the copyright in your tattoo?
  • South Africa
  • 30 July 2018

Tattoos are becoming increasingly common and tattoo parlours now offer customers a broad spectrum of designs to choose from or the option to request a custom design. One interesting question that arises in this context is whether a tattooed person owns the copyright in their tattoo. Unless the copyright in the tattoo was assigned in writing, the answer is no.

Caged songbirds: ownership of copyright in musical works
  • South Africa
  • 23 July 2018

For musicians, securing the protection of and ownership in their work is as important as the work's conception. In order to avoid costly mistakes, musicians should consult a suitably skilled attorney from the inception of their musical works so that sufficient measures can be taken to ensure that any agreements into which they enter are fair and that the ownership of their works remains vested in them, as the author.

When should you hire a patent attorney?
  • South Africa
  • 16 July 2018

The cost of obtaining a patent may seem exorbitant for individual entrepreneurs or start-ups, but IP protection may be critical to their success. Patent attorneys' fees are often comparably higher than those of other attorneys – so why pay a patent attorney to file a patent application?


Media, Marketing, Sports & Entertainment

Lights, camera, action! Tax exemption for films
  • South Africa
  • 26 October 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
  • 06 April 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.