Staff author
How registered donations could increase your tax refund
Taxpayers can deduct donations made to approved charities from their taxable income. Under Section 18A of the Income Tax Act, you can claim up to 10% of your taxable income for the year, provided you possess the correct documentation.
How it works
The receiving organisation must hold official Public Benefit Organisation (PBO) status with SARS. To process your claim, you must obtain a Section 18A tax certificate directly from the charity. This document must clearly state their PBO number, the date, and the specific amount received. SARS regularly rejects claims backed only by bank transfer proofs.
Specific Scenarios
* Scenario 1: Ad-hoc charity giving. You donate R500 a few times a year to various registered charities. You must contact each charity to request a formal Section 18A certificate before tax season opens to consolidate your claim.
* Scenario 2: Payroll giving. Your employer deducts a monthly donation to a registered charity directly from your salary. This amount usually reflects on your IRP5 certificate under a specific source code, making it easier to claim.
* Scenario 3: Donations in kind. You donate R20,000 worth of computer equipment to a registered school. The school must issue a Section 18A certificate reflecting the fair market value of the goods for you to claim the deduction.
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When you are not eligible
Donations made to foreign charities without South African PBO status do not qualify. You also cannot claim deductions for buying raffle tickets, attending charity fundraising dinners, or purchasing goods at a charity auction.
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Disclaimer:This article is for informational purposes only and does not constitute financial or tax advice, and is not exhaustive. Tax laws are complex and subject to change. We strongly recommend consulting with our registered tax practitioner to address your specific circumstances.