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FAQ: Do any exemptions apply to Donations Tax? FAQ: What is Donations Tax? FAQ: What is the rate of Donations tax? FAQ: What is base cost? FAQ: What is a tax deductible receipt? FAQ: What is a bona fide donation? FAQ: What requirements must be complied with after obtaining section 18A approval? FAQ: Which non-core taxes can be paid on e-Filing? FAQ: What does it mean when an organisation is approved by SARS for section 18A purposes? FAQ: Can a section 18A tax deductible receipt be issued without SARS approval?

No, only organisations that have been approved under section 18A of the IT Act by the Commissioner may issue tax deductible receipts to taxpayers in respect of bona fide donations made in cash or in property of kind. The Commissioner must issue a reference number for section 18A purposes to the organisation, which must appear on the tax deductible receipt issued to the donor.

An organisation approved by the Commissioner under section 18A of the IT Act may issue tax deductible receipts to taxpayers in respect of any bona fide donation made in cash or of property made in kind.

  The following non-core taxes may be paid on eFiling, including all payments exceeding R500 000 Company Fees Donation Tax Estate Duty Mining Royalties Other Mining Leases Small Business Amnesty Turnover Tax Value-Added Tax (VAT) for non-registered vendors Withholding Tax on Royalties

An organisation approved by the Commissioner for purposes of section 18A of the IT Act is required to: Only issue tax deductible receipts in the year the donation is received. Maintain proper control over the application of donations received which qualify as a tax deduction. Only issue a tax deductible receipt for a donation used to carry on section 18A approved PBAs. If a PBO carries on both Part I and Part II PBAs, the PBO will be required to obtain an auditor’s certificate certifying that all donations for which tax deductible receipts were issued were used solely in carrying on approved PBAs in Part II of the Ninth Schedule to the IT Act.

A bona fide donation is a voluntary, gratuitous gift disposed of by the donor out of liberality or generosity, where the donee is enriched and the donor impoverished. There may be no quid pro quo, no reciprocal obligations and no personal benefit for the donor. If the donee gives any consideration at all it is not a donation. The donor may not impose conditions which could enable him or any connected person in relation to himself to derive some direct or indirect benefit from the application of the donation.

This is a specific receipt that is issued to a donor by an organisation that has been approved by the Commissioner under section 18A of the IT Act. A taxpayer making a bona fide donation in cash or of property made in kind is entitled to a deduction from his taxable income if the donation is supported by the necessary tax deductible receipt. 

  Base cost is the amount against which any proceeds upon disposal are compared in order to determine whether a capital gain or loss has been realised.   For assets held on the valuation date (1 October 2001) that were acquired before that date  base cost is equal to the “valuation date value” of the asset plus any further qualifying costs incurred on or after that date (paragraphs 20 and 25 of the Eighth Schedule).   For assets acquired on or after the valuation date the base cost of the asset generally comprises the costs incurred in acquiring the asset and improving it. Paragraph 20 of the Eighth Schedule sets out what costs qualify to be part of base cost.   An asset can also be deemed to be acquired for a base cost equal to the market value of the asset at the time of acquisition (for example, if Read More …

Donations tax is levied at a flat rate of 20% on the value of the property donated.