Research Articles (Mercantile Law)

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Browsing Research Articles (Mercantile Law) by Author "Du Plessis, I."

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    Die aftrekbaarheid van rente en huurgeld vir inkomstebelastingdoeleindes
    (Juta Law, 2007-01) Taljaard, C.; Du Plessis, I.
    In die onderhawige saak het BP Suid-Afrika (Edms) Beperk ("BPSA") op 'n kwartaallikse grondslag dividende aan sy houermaatskappy, BP Plc, verklaar. Sodanige verklarings is deur die houermaatskappy vereis. BPSA het in die betrokke jaar van aanslag oor verdeelbare reserwes van R683 miljoen beskik welke reserwes die maatskappy volgens getuienis sou wou behou. BP plc het egter sy belegging in Suid-Afrika op daardie stadium as riskant beskou en wou die fondse uit die land neem. Die gevolg was die verklaring van 'n dividend van R683 miljoen.
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    A comparative perspective on the "joint-action rule" in the context of business trusts
    (Juta Law Publishing, 2014-01) De Waal, M. J.; Du Plessis, I.
    The "joint-action rule" in South African trust law entails that all trustees must act jointly in order to bind the trust. Non-compliance with the rule will most often lead to the invalidity of a contract between the trustees and an outsider. Hence, in the context of business trusts, the application of the rule may be particularly problematic. We submit that the main reason why the business trust remains a useful institution is that the trust brings with it, through the importation of certain standard features, important advantages that need not be specifically bargained for. However, normal rules of trust law, such as the joint-action rule, must also be complied with. Hence, mechanisms to ameliorate some of the problematical effects of this rule can be put in place, such as provisions stipulating that decisions can be taken by a majority of the trustees, or that the trustees can delegate certain defined duties or powers. It is clear, however, that difficulties remain and that South African courts are still facing challenges in developing this area of trust law. But South Africa is not the only trust jurisdiction where the joint-action rule applies and where mechanisms have been developed to address the difficulties experienced with this rule. Comparing the position in South Africa to that in England, Scotland and Canada (including Québec), a remarkable degree of similarity between South Africa, on the one hand, and the other jurisdictions, on the other, as far as the basic application of the joint-action rule is concerned, can be noted. However, there are a number of differences as well. In many of the other jurisdictions legislation generally plays a much bigger role than in South Africa and it may provide a rich source of ideas for the development of this area of South African trust law.
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    Deductibility of royalties: a recent case that ruffled feathers [Discussion of the judgment of Waglay J in case number 11454 in the tax court]
    (Juta Law Publishing, 2006-01) Du Plessis, I.
    INTRODUCTION: The Tax Court, sitting in Cape Town, recently had occasion to consider the deductibility of royalty payments.1 In general it may be said that royalties are payments for the use of another’s intellectual property, such as patents or trade marks. As such, royalty payments are made on a daily basis in the commercial world. It has always been widely accepted that royalty payments are deductible from income in terms of the general deduction formula2 and taxpayers have for years claimed this deduction without objection from the South African Revenue Service. In the case under discussion, the Commissioner for the South African Revenue Service (the ‘‘Commissioner’’) successfully challenged this accepted view regarding the deductibility of royalties, the court finding that the payments were of a capital nature and therefore not deductible.
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    The incorporation of double taxation agreements into South African domestic law
    (2015) Du Plessis, I.
    There are different opinions as to the process whereby double taxation agreements (DTAs) are incorporated into South African law. This contribution aims to discuss some of the existing opinions and to offer a further perspective on the matter. At the heart of the debate lies the interpretation of two provisions, namely section 231 of the Constitution of the Republic of South Africa and section 108 of the Income Tax Act and the interaction between the two. This contribution argues that South Africa's DTAs are not self-executing (a term referred to in section 231(4) of the Constitution) and should therefore be enacted into law by national legislation. It is furthermore argued that section 108(2) of the Income Tax Act enables a DTA to be incorporated into South African domestic law, by means of publication in the Government Gazette. An analysis of the case law supports this argument. Whether or not DTAs are regarded as self-executing, the status of a DTA in relation to the Income Tax Act still has to be determined. In other words, once the DTA forms part of South African domestic law, does it rank higher, lower or on a par with the Income Tax Act? It is submitted that the status of DTAs in South Africa is determined by the Constitution. It is furthermore submitted that South Africa's DTAs do not attain a status on the same level as the Constitution and that the Constitution allows for the possibility that South Africa's DTAs may be overridden by subsequent legislation (for example, by amendments to the Income Tax Act). Whether or not an override will take place in a specific case should, it is submitted, be determined by the application of the principles of statutory interpretation which apply in the case of conflict. Although this latter submission finds support in the minority judgement in Glenister, both the AM Moolla and Tradehold decisions express contrary views. The hope is expressed that the South African courts will provide clarity on this matter in due course.
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    The interpretation of double taxation agreements : a comparative evaluation of recent South African case law
    (Juta Law, 2016-10) Du Plessis, I.
    Vogel and Rust describe the act of interpretation as unfolding a text, to bring it to be understood. The South African courts have recently had a number of opportunities to interpret double taxation agreements entered into by South Africa. For example, in May 2015 the tax court in Johannesburg delivered judgment in a case dealing with the double taxation agreement between South Africa and the United States of America. In August 2015, the supreme court of appeal considered the double taxation agreement between South Africa and Australia. Besides the relevant findings on the merits of the cases, both these judgments contain a number of interesting points regarding the interpretation of double taxation agreements. It is these points regarding interpretation that this contribution aims to examine.