Dear Valued Clients,
We wish to inform you of recent updates regarding tax certificates for tax-deductible donations and the requirements for Public Benefit Organizations (PBOs) as mandated by the South African Revenue Service (SARS). These changes, effective from 31 May 2024, have significant implications for both PBOs and their donors.
Public Benefit Organizations (PBOs): New Requirements and the 31 May 2024 Deadline
In the past, valid section 18A certificates from a PBO needed to include the PBO’s particulars, details of the donation’s date, amount, or nature, confirmation of the donation’s intended use, and the donor’s name and address.
However, from 1 March 2023, SARS introduced additional requirements for all section 18A certificates. Now, these certificates must also include the donor’s identification or registration number, trading name (if different from the registered name), income tax reference number, contact number, email address, and a unique receipt number. This expansion aims to improve transparency and accuracy in tracking donations.
Additionally, PBOs are now required to submit bi-annual IT3(d) reports to SARS. These reports must include comprehensive data on section 18A tax certificates issued, such as details about the S18A-approved institution, donation particulars, and donor information for the 2023/2024 year of assessment (from 1 March 2023 to 28 February 2024). The inaugural deadline for these submissions is 31 May 2024, and reports must be submitted via E-filing.
The Importance of Compliance
Compliance with these new requirements is crucial. Failure to provide the necessary information will prevent donors from claiming their tax deductions. This could discourage donations and impact the funding of various charitable activities. Therefore, it is essential for PBOs to ensure that all required data is accurately collected and reported.
Moreover, even if the initial deadline has been missed, it remains vital to submit the required information as soon as possible to avoid further complications and potential penalties.
Your attention to these matters is crucial as we navigate these new requirements together to ensure compliance and efficiency. Staying informed and proactive in adapting to these changes will help maintain the integrity and functionality of the donation system.
For more detailed guidance, please refer to the SARS Basic Guide to Income Tax for Public Benefit Organisations here.
Thank you for your cooperation.
