Exploring South African tax consequences of compensation received by amateur rugby players

by | Dec 8, 2024 | SAMLJ, SAMLJ V36 I1

Exploring South African tax consequences of compensation received by amateur rugby players

Authors: Danielle van Wyk & Cara Thiart

ISSN: 1996-2185
Affiliations: Senior Lecturer in Accounting at the School of Accountancy, Faculty of Economic and Management Sciences, University of Stellenbosch; Lecturer in Taxation at the School of Accountancy, Faculty of Economic and Management Sciences, University of Stellenbosch
Source: South African Mercantile Law Journal, Volume 36 Issue 1, 2024, p. 59 – 86
https://doi.org/10.47348/SAMLJ/v36/i1a3

Abstract

Both professional and amateur rugby players participate in community rugby. There is currently no guidance in the South African literature that expressly addresses the possible tax consequences of compensation received by amateur rugby players, if any. The objective of this article is therefore to explore the potential tax consequences of such compensation. The research approach entails an exploratory study, adopting a qualitative research approach in the form of an extensive literature review and an international comparative analysis. The study provides contradictory insights on the common perception that compensation received by amateur rugby players has no tax implications in South Africa. The study found that contracted amateur rugby players are considered employees of community rugby clubs and their compensation, depending on the nature, is in most instances taxable. Non-contracted amateur rugby players whose compensation consists of only the reimbursement of bona fide expenses are not considered employees of community rugby clubs, although reimbursements received may be subject to taxation. The findings are compared to current taxation practices of sports players in Australia, New Zealand, Singapore, and the United Kingdom. The research is valuable to amateur rugby players and community rugby clubs to ensure tax compliance and improved compensation practices.

The application of section 8c of the Income Tax Act 58 of 1962 in the context of trust structures

by | Dec 8, 2024 | SAMLJ, SAMLJ V36 I1

The application of section 8c of the Income Tax Act 58 of 1962 in the context of trust structures

Authors: Lumen Moolman & Riaan Wessels

ISSN: 1996-2185
Affiliations: Partner, Webber Wentzel; Senior lecturer, Department of Accountancy, University of Johannesburg
Source: South African Mercantile Law Journal, Volume 36 Issue 1, 2024, p. 87 – 111
https://doi.org/10.47348/SAMLJ/v36/i1a4

Abstract

Broadly, section 8C of the Income Tax Act 58 of 1962 seeks to tax directors and employees at revenue rates on certain amounts arising in the context of the ownership of shares or instruments deriving their value from shares (ie, ‘equity instruments’ as defined in section 8C). Paragraph (c) of the ‘equity instrument’ definition was introduced into section 8C(7) with the purpose of ensuring that employees cannot avoid the consequences of section 8C by interposing an intermediary entity between themselves and the shares to which their incentives or remuneration are linked. In terms of paragraph (c) of the ‘equity instrument’ definition, the ambit of section 8C was extended to include ‘any contractual right à the value of which is determined directly or indirectly with reference to a share’. This study considered the application of paragraph (c) of the ‘equity instrument’ definition in the context where an employee receives a contractual right, the value of which is derived from shares as well as non-share-related assets. Based on the wording of section 8C, read in the overall context and purpose of the provision, an interpretation where section 8C applies either fully to a contractual right (where the majority of the assets are shares) or not at all (where the minority of the assets are shares) seems to best marry all the relevant factors.

Case note: Circumventing section 7(8)(a)(i) of the Divorce Act 70 of 1979 and section 37d of the Pension Funds Act 24 of 1956 through strategic resignation: CNN v NN2023 (5) SA 199 (GJ)

by | Dec 8, 2024 | SAMLJ, SAMLJ V36 I1

Case note: Circumventing section 7(8)(a)(i) of the Divorce Act 70 of 1979 and section 37d of the Pension Funds Act 24 of 1956 through strategic resignation: CNN v NN2023 (5) SA 199 (GJ)

Authors: Tumo Maloka & Koma Ramontja

ISSN: 1996-2185
Affiliations: Professor at University of Pretoria; PhD Candidate—National University of Lesotho
Source: South African Mercantile Law Journal, Volume 36 Issue 1, 2024, p. 112 – 124
https://doi.org/10.47348/SAMLJ/v36/i1a5

Abstract

None

Case note: The value of characterisation: Competition Commission v Irwin & Johnson & another (2022) 2 CPLR 26 (CAC)

by | Dec 8, 2024 | SAMLJ, SAMLJ V36 I1

Case note: The value of characterisation: Competition Commission v Irwin & Johnson & another (2022) 2 CPLR 26 (CAC)

Author: Damian Schmidt

ISSN: 1996-2185
Affiliations: Attorney at law in Stuttgart (Germany)
Source: South African Mercantile Law Journal, Volume 36 Issue 1, 2024, p. 125 – 134
https://doi.org/10.47348/SAMLJ/v36/i1a6

Abstract

None

The balancing act continues: Recommendations for reform of the National Credit Act 34 of 2005

by | Oct 13, 2024 | SAMLJ, SAMLJ V35 I3

The balancing act continues: Recommendations for reform of the National Credit Act 34 of 2005

Author: Bronwyn Le-Ann Batchelor

ISSN: 1996-2185
Affiliations: Head of Faculty: Law at the Independent Institute of Education
Source: South African Mercantile Law Journal, Volume 35 Issue 3, 2023, p. 241 – 272
https://doi.org/10.47348/SAMLJ/v35/i3a1

Abstract

Through the enactment of the National Credit Act 34 of 2005 (‘NCA’), the government has focused on the protection of consumers with regard to credit agreements. Legislative protection is necessary due to the parties’ unequal bargaining power at the agreement’s conclusion. Despite these endeavours, there is still the common occurrence of a breach of the agreement by consumers and the ensuing recovery process by credit providers. The equitable balancing of the rights and responsibilities of the parties is essential to the well-being of the parties, the credit industry and the economy. The pre-enforcement procedure is at the centre of the tug of war between the parties. Section 129 of the NCA encapsulates the pre-enforcement procedure and thus determines the balancing of the parties’ rights and responsibilities through its interpretation and application. The section falls short in a number of areas and has resulted in disputes, interpretations and two subsequent amendment acts. This article critically analyses section 129 and determines if the rights of both parties have been equally protected, with reference to the burden of bringing the section 129 notice to the consumer’s attention, based on two schools of thought. The article then contributes to the balanced interpretation of the section by way of amendment recommendations.

The application of the Compensation for Occupational Injuries and Diseases Act on impairment caused by sexual harassment

by | Oct 13, 2024 | SAMLJ, SAMLJ V35 I3

The application of the Compensation for Occupational Injuries and Diseases Act on impairment caused by sexual harassment

Author: Kamalesh Newaj

ISSN: 1996-2185
Affiliations: Associate Professor: University of Pretoria
Source: South African Mercantile Law Journal, Volume 35 Issue 3, 2023, p. 273 – 297
https://doi.org/10.47348/SAMLJ/v35/i3a2

Abstract

This article addresses the question of whether a sexually harassed employee has recourse to the Compensation for Occupational Injuries and Diseases Act 130 of 1993. This is dependent on whether injuries or diseases sustained as a result of sexual harassment can be regarded as injuries or diseases that arise out of and in the course of employment. A very restrictive test has been developed to answer this question, which is whether the act giving rise to the injury or disease, in this context sexual harassment, can be regarded as a risk inherent to the work performed by the employee. The test focuses on the duties performed by the employee and the risks that are ordinarily inherent in the performance of those duties. Sexual harassment will generally not be regarded as a risk inherent to the performance of a job and is therefore discounted as an occupational injury or occupational disease. However, the courts’ approach is criticised for failing to interpret important social security legislation in line with international standards and in a purposive manner that gives effect to the constitutional right afforded to everyone to access social security.