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.
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.
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.
Business owners often fail to conduct trademark availability searches before they register their company name at the Companies and Intellectual Property Commission (CIPC). The CIPC considers only identical or confusingly similar company names that are contained on the company names register (and not those that are contained on the trademarks register) to be potential blocks to registration. Therefore, company names that proceed to registration may infringe on trademark rights as set out in the Companies Act.
In an age where business is conducted online, trademarks are commercialised through websites and social media pages and consumers want to deal with businesses online instead of face to face, a business' virtual address is of the utmost importance if it wants to drive traffic to its website and conclude commercial transactions online. So, what happens if a third party registers a domain name that incorporates an existing trademark? How can trademark owners begin to take action and enforce their rights?
According to the Copyright Act, for copyright to subsist in a work, the work must be original and reduced to material form. However, if ideas and innovation are the result of the shared lived experience of the common person, how can it be determined whether a work is 'original' as defined in, for example, the Copyright Act? In order to be original, a work need not be innovative or new, but rather the result of the author's own skill, time and effort expended in creating the work.
South Africa has seen a dramatic rise in entrepreneurial activity, with many seeking to launch new products in the marketplace. However, with the success of a product comes the risk of the idea being copied and advantage being taken of the already established route to market, thereby affecting the original product's sales and brand. Therefore, any party that creates or legitimately distributes a product that they believe will be well received must take the appropriate steps to protect it.
A granted patent is a highly lucrative commercial tool in the hands of the patent applicant. However, inventors are not necessarily entitled to apply for a patent, especially in employment contexts. Inventors are therefore advised to consult with a patent attorney when they are uncertain whether an invention falls within the scope and course of their employment. It is further advisable to enter into negotiations with employers regarding compensation for the invention.
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.