Donations Tax Exemption - What you should know
Have you received a donation or made a generous donation recently? Understanding how to declare your donations is important.
Frequently asked questions
What is the donations tax rate
Donations tax South Africa is levied at a flat rate of 20% for donations under R30 million. If donations exceed R30 million, then the tax authorities levy the donation tax rate at a flat rate of 25%.
What is the donations tax exemption
Every individual has the right to claim a R100 000 donations tax exemption rebate each tax year. This amount is exempt from donations tax application.
Does the government levy tax on donations when someone donates a property
The Donee will be liable for transfer duty for property value over R1 000 000. The Donor will be liable for donations tax. If the Donor fails to pay the transfer duty, the Donee can collect it.
Are there exemptions with the donation of property
Yes the following instances attract no donations tax:
- Donation made to an approved Public Benefit Organisation.
- A donation made to Government.
- Donations cancelled within 6 months.
- Between spouses under a duly registered antenuptial or post nuptial contract.
- Donations made as a result of death.
- Exemptions for non-natural persons is R 10 000 per annum on gifts.
- The first R100 000 of property donated by a natural person is exempt from donations tax.
- Donations made in lieu of the maintenance of someone.
How do you pay Donations Tax
I complete and submit a Donations tax return IT144 to SARS. Prepare and file all the correct supporting documentation in a timely manner.
What qualifies as a donation
A donation is giving something without any expectation of it being returned or paid back.
When is a donation effective
The donation is essentially effective once it has a tax disclosure implication.
Are donations to charities tax exempt
Donations to a charity is only tax exempt if you are in the possession of a Section 18A Tax Certificate. The donation exemption is limited to a maximum of 10 % of the Donar's taxable income.
What are the obligations of a Donee
There are no tax consequences for the Donee unless the Donor didn't declare. The Donee will liable for the donations tax if the Donor didn't declare the donation to SARS.
Do you need our help registering and submitting your Donations Tax?
Contact our team via any of the following channels to get a proposal for your accounting and tax services:
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