There was another 100 year anniversary this year – that of income tax. It is said that heated debate followed the introduction of the resolution placed before Parliament by Minister of Finance and Defence, Jan Smuts. Quite understandable... Finally a divided House saw 64 "aye" votes to 31 "nays".
Some things never change. Several of the newer additions to the current Income Tax Act were borrowed and adapted from Australian, Canadian and, especially in the case of VAT, New Zealand tax statutes. Well, our very first Income Tax Act (28 of 1914) was based on the New South Wales Act.
It is a universal principle that where certain types of income are received by a person from a foreign source, the payer in that foreign country is obliged to withhold tax. This is almost standard when it comes to payments like dividends, interest and royalties but some countries also impose withholding taxes on other types of income, such as fees from certain types of services.
Taxpayers incur expenditure and losses through theft or fraud on a daily basis. This is an unfortunate reality of doing business in South Africa. There are many ways in which money can be stolen from a business. An employee may steal money or there may be a break-in or robbery at the business premises. Money may be stolen through unlawfully altering a cheque or unauthorised access to internet banking. The theft or fraudulent loss of money from a business has income tax implications for both the victim and the thief.
Despite the bad press that special purpose vehicles (SPVs) received during the Enron scandal, they are still an everyday feature of many financial structures. They are commonly used in project finance transactions and in respect of employee incentive schemes, and normally serve a specific business purpose: they are generally created to be independent, bankruptcy remote vehicles and allow the financiers in syndicated loan transactions to share the proceeds of the security provided by the borrower. For example, a typical greenfields renewable energy project might have several financiers and "Security SPVs" would typically be an integral part of the financing arrangements required by the financiers of such a project.
During December 2013, SARS released a draft discussion paper in which it set out its application of the relevant tax law in relation to the tax treatment of the purchaser and seller when contingent liabilities form part settlement of the purchase price of assets acquired as part of a going concern. SARS states that the document was prepared in light of recent judgements delivered by local and foreign courts in addition to numerous requests for clarity on the issue.
In terms of the ordinary business practices of property companies, it is not uncommon to outsource property and asset management functions to third party property and asset managers.
The Incentive Theory is the most popular explanation for why the patent system is a good thing for society. According to the Incentive Theory, innovating is inherently risky and expensive and so we need to provide incentives to encourage innovation. Without incentives, no profit-driven company would invest in research and development (R&D), knowing that the output of their R&D could immediately be copied by a company that had not incurred the cost of development.
South Africa had its first keywords trade mark decision recently. This is a decision that deals with the question of whether or not it's lawful for a company to purchase as a keyword (think Google Adwords) a word that is the trade mark of a competitor, which has the effect that anyone searching that word will, in addition to the so-called 'natural results' that come up, see adverts placed by the company that bought the keyword.
In Cochrane Steel Products v M-Systems Group 39605/13 ZASGHC 29/10/14, Cochrane Steel Products sought an interdict against M-Systems for bidding on its brand name CLEAR VU as a Google Adwords search keyword. The applicant did not have a trade mark registration for its mark and accordingly relied on an action based on unlawful competition. Specifically, it alleged passing off and a species of unlawful competition, "leaning on".
The South African Competition Act (89 of 1998), like many of its counterparts in the developing world, incorporates traditional competition law principles with public interest considerations. The concept of public interest is woven into and features prominently in various parts of the Act.