Editorial

• Pages: v-vii
• Published date: 01 September 2020
• Author: Milton Seligson
• DOI: 10.10520/ejc-btclq-v11-n3-a1
• Date: 01 September 2020

v

© Siber ink

Editorial

MILTON SELIGSON SC

This edition of the BTCLQ has two articles that focus on recent decisions

of the Courts in tax disputes related to important provisions of the Income

Tax Act (ITA).These provisions are: section 23H, which requires deductible

expenditure to be ‘spread’ where the supply of goods, the rendering of

services, or the enjoyment of any other benef‌it will extend beyond a year

of assessment; and section 24C, which permits the taxpayer to claim an

allowance in respect of future expenditure on contracts.

The third article breaks new ground by investigating the arcane but

increasingly topical world of cryptocurrency — Bitcoin and the like — and

delving into the complexity of whether a cryptocurrency e-wallet consti-

tutes relevant material for the purposes of SARS’s investigative powers

under the Tax Administration Act.

The f‌irst article, by Michael Rudnicki and Julia Choate, concerns the

decisions of the Tax Court in Case No IT 24462 decided on 19 November

2018, and that of the Supreme Court of Appeal (SCA) in the appeal by

the South African Revenue Service (SARS) against the judgment of the Tax

Court, which is reported as Telkom SA Soc Ltd v Commissioner, South African

Revenue Service 2020 (4) SA 480 (SCA) at 499–502. The second article, by

Liesl Kruger and Des Kruger, relates to the decisions of the SCA in the cases

of Commissioner, South African Revenue Service v Big G Restaurants (Pty) Ltd

2019 (3) SA 90 (SCA) and Commissioner, South African Revenue Service v Clicks

Retailers (Pty) Ltd 2020 (2) SA 72 (SCA) and the subsequent, recent decision

of the Constitutional Court in granting the losing taxpayer in Big G leave

to appeal, and entertaining, but dismissing the appeal. It is understood that

the Constitutional Court has also given Clicks leave to appeal, but that the

hearing of that appeal is still pending.

The f‌irst article analyses the provisions of section 23C before discussing

the judgment of the Tax Court, which upheld the taxpayer’s argument

that it was entitled to deduct the full incentive bonus expenditure that

was in issue, section 23C being inapplicable. The article then examines

the judgment of the SCA which reversed the decision of the Tax Court

on the basis that the taxpayer did not enjoy the immediate benef‌it of

the incentive bonuses paid for the conclusion of customer subscription

contracts, but that this enjoyment extended over the 24-month period of

the subscription contracts. The article then embarks on a critical analysis

of the SCA judgment and concludes that there may well be room in the