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New Section 18A requirements
The tax benefits of Section 18A Certificates are often a big motivation for donors to support your cause. Here Nicole Copley tells you what donor information you need in order to issue valid certificates.
Government Gazette 48104, issued on 24 February 2023, makes the expanded requirements for 18A receipts effective from 1 March 2023 (so, right away!), and all receipts issued from this date onwards must comply with the updated rules.
From 1 March 2023, an 18A receipt must, in addition to the details previously required, also include:
Important note one
- A unique receipt number
- Contact number
- Email address
- Income tax reference number (if available)
- What kind of legal ‘person’ the donor is:
- NPC/human/(Pty) Ltd/CC/(Inc)/trust)
- If donor is a human being:
- Identification type and country of issue (SA
- ID or passport and country)
- ID or passport number
- If donor is a legal entity:
- Registration number of legal entity (CIPC/ trust number)
- If it has a trading name different from its registered name, the trading name
The Regulations specifically refer to ‘all receipts issued’ which means that, even if the receipts are issued for donations which have been received some time in the past, they must comply.
Important note two
An 18A receipt need only be issued if the donor wants to claim a tax deduction. And this tax deduction can only be claimed within the South African tax system. So 18A receipts are only needed by South African taxpayers.
Important note three
SARS has not made the recording of the donor tax reference number mandatory. This is
- Submissions made to SARS indicated that organisations feared that the extra schlep of finding and filling in a tax reference number would disincentivise donations, especially for online ‘quick click’/scan donations;
- SARS has the systems to find tax reference numbers based upon ID/other registration numbers, anyway.
We do still advise that the income tax reference number is collected, when possible.
For those looking for a handy resource, ngoLAW has created an updated blank-format 18A receipt for your use. You can download it here
Nicole Copley is founder of ngoLAW, and is a Master Tax Practitioner and non-practising attorney with 30 years of experience in working for the NGO sector. She and her team co-create, register and renovate a broad range of NGOs. They enable appropriate and supportive governance, support NGOs in being sustainable, resilient and authentic and provide drafting, advice and compliance services.
Email email@example.com or visit https://ngolawsa.co.za
Watch this space for advice on the new 18A Third Party SARS Returns.