Donating to causes you care about is a meaningful way to make a difference – but before you do, it’s crucial to understand the tax implications. Not all donations are tax-deductible, and SARS regulations are strict when it comes to donations tax.

Here’s what every donor should know:

What Qualifies as a Donation?

Donations can take many forms beyond just cash. You can donate:

• Goods or assets,
• Services,
• Anything of value – even at a discounted rate.

In short, anything that can be traded can be donated. But how it’s treated for tax purposes depends on the circumstances.

When Is a Donation Tax-Deductible?

To qualify for a tax deduction, a donation must meet key criteria:

• There must be no expectation of receiving anything in return. This ensures the gift is genuine and not seen as a form of exchange or influence.
• Donations must be made to a Public Benefit Organisation (PBO) that is approved under Section 18A of the Income Tax Act.
• You’ll need a valid Section 18A certificate from the organisation for your tax return.

Understanding Donations Tax

• Donations tax is separate from your normal tax obligations.
• The donor is typically liable for donations tax, not the recipient.
• If the donor doesn’t pay within the required timeframe, both the donor and the donee can be held liable.
• You must submit an IT144 declaration form and pay the tax by the end of the month following the donation.
• The first R100,000 of property donated by an individual each year is exempt from donations tax.

Keep It Compliant

Failure to follow SARS regulations can result in penalties, even if your intentions are good. Always keep proper documentation and consult a tax professional before making large or complex donations.

Need help understanding your donations and tax obligations?

We’re here to guide you every step of the way – from evaluating the deductibility of your gift to filing the correct forms with SARS.

Contact Us

WhatsApp: +27 82 858 3919

Call: +27 71 360 0018

Email: mari@mmbaccounting.co.za

Make an impact – the right way. Let us help you donate smart.