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Expanded requirements for 18A receipts: March 2023

If your organisation is a section 18A-approved organisation, know that the rules around issuing 18A tax receipts to donors have changed. Effective 1 March 2023, SARS has issued expanded requirements for 18A receipts and all receipts issued from this date onwards must comply with the updated rules.

Previously, the information which organisations have been required to record were:

  • The organisation’s name, address and PBO number;
  • The donor’s name and address;
  • The date of receipt of the donation;
  • The value or amount of the donation; and
  • The required certification: that the donation would be used exclusively for the 18A objects of the organisation.

That required list of information has now got quite a bit longer.

From 1 March 2023, an 18A receipt must, in addition to the details listed already, also include:

  1. A unique receipt number

  2. Donor details:
    1. Contact number
    2. Email address
    3. Income tax reference number (if available)
  1. What kind of legal ‘person’ the donor is:  NPC/human being/(Pty) Ltd/CC/(Inc)/trust)

  2. If donor is a human being:
    1. Identification type and country of issue (SA ID or passport and country)
    2. ID or passport number
  1. If donor is a legal entity:
    1. Registration number of legal entity (CIPC/trust number)
    2. If it has a trading name different from its registered name, the trading name

Important Note 1:  The Regulations specifically refer to ‘all receipts issued’ which means that, even if the receipts are issued for donations received in the past, they must comply.
 
Important Note 2: An 18A receipt need only be issued when 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 3: SARS has not made the recording of the donor tax reference number mandatory. 
This is because:

  • 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, we have created an updated blank-format version for your use, download here.

 

Nicole Copley

Nicole has consulted to the NGO sector since 1993. She is an admitted attorney (non-practising), has her Masters in the tax exemption laws and is a Master Tax Practitioner. Nicole developed her drafting skills while working as a business lawyer, and she has a pragmatic problem-solving approach to all the work she does. Her depth and breadth of experience over many years and her work with government and a wide range of clients, give her useful perspective and insight. Nicole also lectures and trains on various topics of importance to the NGO sector. She is author of ‘NGO Matters: A practical legal guide to starting up’, and publisher of the series of NGO Matters handbooks.

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