![]() Presents her ClubCard at checkout, a contract of sale is concluded Purchase above the stipulated value threshold In broad terms, Clicks claims the sectionįollowing basis. In terms of section 24C of the Income Tax Act. In its income tax return for the 2009 tax year,Ĭlicks included an amount of R58 550 602 in its gross income andĬlaimed an allowance of R44 275 965 for future expenditure against Support it to, among other things, fund its operations Ĭlicks says that deferring this deduction to a subsequent year would To claim a deduction of approximately R36.18 million. Million, in respect of which Clicks, if successful, would be entitled Tax year, 2% of all qualifying purchases equated to around R58.5 Tax treatment and the cash flow of its business. On that value has significant ramifications for Clicks’ The question whether Clicks is entitled to defer Presents their ClubCard and earns loyalty points) toĬustomers. Value of all qualifying purchases (that is, purchases where the TheĪmount that Clicks seeks to claim under section 24C forms part of theĬase and is not in dispute. On redemption of their cash back vouchers. ![]() Its taxable income the cost of the merchandise that will be provided In practice, this means that Clicks deducts from The payment of commission relating to sales TheyĬity Lodge and Thompsons Holidays, each of which has concluded an Loyalty points which can be redeemed at Clicks stores. The customer in a single purchase transaction at Clicks or one of its In order to qualify for loyalty points at least Of the customer’s application, Clicks issues a ClubCard to the Submits the enrolment form (ClubCard contract). A contractĪnd the customer comes into existence when the customer completes and A customer is required to apply in writing or Loyalty points for shopping at Clicks thatĬash back vouchers, which are not redeemable for cash, but which mayĬustomer accumulates the requisite number of loyalty points within aĬlicks offers loyalty programme membership freeĬustomers. In terms of the loyalty programme, participating customers receive Service (the Commissioner or SARS as may be appropriate).Ĭlicks runs the Clicks ClubCard programme (loyalty In the pharmacy, health and beauty categories, to the public. The applicant is Clicks, a retailer that sells Taxable income under the general deduction formula ![]() Such expenditure then becoming deductible from the taxpayer’s On such income is deferred until the year of assessment in which theįuture expenditure is “actually incurred” Which it is obliged to incur in terms of such contract. It allows a taxpayer to defer paying tax on income if that incomeĪccrues in terms of a contract and will be used to financeĮxpenditure (that is, expenditure incurred in a subsequent tax year), In which the expenditure is actually incurred. Rule in the Income Tax Act that expenditure is only deductible in the Section 24C creates an exception to the general Shall be deemed to be income received by or Respect of so much of such expenditure as in their opinionĪllowance deducted under subsection (2) in any year of assessment (not exceeding the said amount) as the Commissioner may determine, in Their obligations under such contract, there shall be deducted in theĭetermination of the taxpayer’s taxable income for such year such allowance Satisfied that such amount will be utilised in whole or in part to financeįuture expenditure which will be incurred by the taxpayer in the performance of Taxpayer in any year of assessment includes or consists ofĪn amount received by or accrued to them in terms of any contract and the Commissioner is Section, “future expenditure” in relation to any year ofĪssessment means an amount of expenditureĪmount will be allowed as a deduction from income in a subsequentĪcquisition of any asset in respect of which any deduction will beĪdmissible under the provisions of this Act. Year, when Clicks sought to claim an allowance under the section,Īllowance in respect of future expenditure on contracts Which operates one such loyalty programme. Is available to Clicks Retailers (Pty) Limited (Clicks), a retailer ![]() This matter concerns the tax treatment of retail THERON J (Mogoeng CJ, Jafta J, Khampepe J, Madlanga J, Mathopo AJ, The applicant shall pay the respondent’s costs, including High Court of South Africa, Western Cape Division, Cape Town), Limited v Commissioner for the South African Revenue ServiceĬJ, Jafta J, Khampepe J, Madlanga J, Mathopo AJ,Īppeal from the Supreme Court of Appeal (hearing an appeal from the Clicks Retailers (Pty) Ltd v Commissioner for the South African Revenue Service (CCT 07/20) Z(4) SA 390 (CC) 2021 (10) BCLR 1102 (CC) 84 SBIP 16 (CC) ()
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