The South African Revenue Service recently published Binding Private Ruling 310, which deals with the tax treatment of customer loyalty programmes. The applicant was a local company supplying goods and services in the course of trade, which had – in order to enhance its business – proposed to implement a customer loyalty programme through which participating customers could benefit.
The South African courts have held, on a number of occasions, that taxpayers are entitled to deduct damages or compensation paid to third parties. However, this principle does not apply in all cases. A recent High Court decision has made clear that before a taxpayer calculatedly breaches an agreement, it should carefully consider the incidence of tax.
United Manganese of Kalahari (Proprietary) Limited (UMK) recently applied to the High Court for declaratory relief in relation to the correct interpretation and application of Section 6(3)(b) of the Mineral and Petroleum Resources Royalty Act. The South African Revenue Service alleged that UMK had incorrectly deducted transport and distribution costs from gross sales and, in so doing, had estimated these costs instead of using actual costs incurred.
Under Section 93 of the Tax Administration Act, there are five circumstances under which the South African Revenue Service may issue a reduced assessment in order to reduce a person's tax liability. While Section 93 makes it possible to 'skin a cat' (ie, reduce tax liability) in more ways than one, taxpayers should be mindful of the requirements that must be met and the correct process to follow in order to achieve the desired result.
The Supreme Court of Appeal recently had to determine whether an assessment issued for secondary tax on companies (STC) in respect of a dividend cycle ending in February 2007, which had been levied under the Income Tax Act, had prescribed in accordance with the Tax Administration Act. The key issue for consideration was whether the Tax Administration Act had prohibited the South African Revenue Service from issuing the assessment for STC in respect of that dividend cycle.
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.
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.
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.
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.
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.
In order to build a brand, one of the most important steps is to register a trademark. The first step is to conduct a search of the Trademarks Register to ensure that the trademark does not infringe registered rights. Provided that the results of this clearance search are favourable, the next step is to file an application for registration. However, this is not the final step, as action can be taken for trademark infringement only once the trademark has been registered.
Graffiti is generally no longer considered to be a work of vandalism or an act of destruction of public property. Instead, it has become a marketable commodity, with some fashion labels and major corporations even using it in their advertising campaigns. However, graffiti's legal status as art has not been established, which begs the question of whether it can be protected by copyright and has raised a number of issues concerning its commercial use.
Rights holders often threaten to enforce their rights against others as a scare tactic while knowing that actually enforcing them would not be that simple. A prime example of this is when rights holders threaten third parties with a patent or design infringement action despite knowing that their patent or design is not necessarily valid or that the third party has a valid excuse for the alleged infringement. Fortunately, in South Africa aggrieved parties can defend themselves against these so-called 'infringement bullies'.
The Copyright Act does not require registration in order to acquire copyright for a particular work. Instead, copyright subsists automatically once a work has been completed, provided that certain requirements have been met. For example, a work must be original and in writing or a material form. In addition, the author must have been a qualified person when the work or a substantial part thereof was created.
A business's intellectual capital, particularly its patent portfolio, is one of many factors which should be thoroughly evaluated prior to entering into a licensing agreement or undertaking a merger or acquisition. While every commercial transaction is unique, during such an evaluation, a number of matters should be considered in view of the Patents Act.
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.
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.
The recent promulgation of the International Arbitration Act gave the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration the force of law in South Africa. Given the cross-border nature of shipping disputes, the act promises to enhance the attraction of what is already a litigation-friendly jurisdiction.
The High Court's decision in a recent case involving a protective writ issued by a creditor of Hanjin at the time of the company's collapse was recently appealed before the Supreme Court of Appeal. A number of Hanjin creditors have filed an application for a time extension to serve the writs of arrest pending the outcome of the appeal. In the absence of an extension, the writs will have no further force or effect.
The longstanding practice of issuing a protective writ is directed at preserving the claimant's right to arrest a vessel in rem, notwithstanding a subsequent change of ownership. This matter did not come before the South African courts until recently, when the buyer of a vessel applied to the courts to have the protective writ set aside. The root of the problem lies in the apparent paradoxical Admiralty Jurisdiction Regulation Act provisions relating to the time of commencement of an admiralty action.
In a recent case, the Saharawi Arab Democratic Republic and the Polisario Front successfully applied to the Eastern Cape Local Division of the High Court for an order restraining and prohibiting the owners, master and charterers of the Cherry Blossom vessel, among other parties, from taking a cargo of phosphate out of the court's jurisdiction, pending the determination of the applicants' claim to ownership and delivery of the cargo.