SARS requires that the following information must be included on a Section 18A Tax Receipt issued in terms of section 18A(2)(a) of the Income Tax Act, valid for all donations from 1 March 2023.
Kindly submit your details with the below form for us to issue your tax certificate.
What Are Qualifying Donations For Purposes Of S18A
In the context of the Income Tax Act in South Africa, Section 18A donations refer to donations made to specific Public Benefit Organizations (PBOs) or entities that are eligible to issue Section 18A tax deductible receipts. These receipts enable donors to claim tax deductions on their contributions in their income tax returns. There are different types of Section 18A donations based on the nature of the contributions and how they qualify for tax benefits.
To qualify as a valid (bona fide) donation Gratuitous disposal by the donor out of liberality or generosity No quid pro quo, no reciprocal obligations and no personal benefit for the donor.
Different Types Of Section 18A Donations
Financial Donations:
•Cash donations are the most common type of Section 18A donations. These include monetary contributions made by individuals or businesses directly to registered PBOs. The PBO issues a Section 18A tax deductible receipt for the donated amount, which the donor can use to claim a tax deduction on their income tax return.
In-Kind Donations:
•In-kind donations refer to non-cash contributions, such as goods or assets, provided to a registered PBO. These can include food, clothing, equipment offered to support the organization’s charitable activities. When properly valued and verified, in-kind donations can qualify for Section 18A tax deductions, and the PBO issues a receipt for the estimated value of the donated items.
Payroll Giving:
•Payroll giving, also known as workplace giving or employee giving, allows employees to contribute to PBOs through regular deductions from their salaries. The employer deducts the specified amount from the employee’s salary and donates it to the chosen PBO on their behalf. If the PBO is eligible to issue Section 18A tax deductible receipts, employees can claim tax deductions for their contributions. The section 18A-approved institution issues the section 18A tax deductible receipt to the employer and the employer must take these donations into account when determining the monthly employees’ tax to be deducted from the employees’ remuneration.
Non-Qualifying Donations
× Donation of services rendered such as a professional person renders a skill free of charge.
× An amount paid for attending a fundraising dinner, dance or charity golf day.
× The amount paid for the successful bid of goods auctioned to raise funds by an institution and Memorabilia, paintings, etc., donated to be auctioned to raise funds.
× Amounts paid for raffle or lottery tickets.
× Amounts paid for school fees, entrance fees for school admittance or compulsory school levies.
× Value of free rent, water and electricity provided by a lessor to the lessee which is an approved PBO.
× Payments in respect of debt due.
