HomeHome SearchSearch MenuMenu Our productsOur products

Do you know what kind of company you need to donate to, to get a tax deduction in return?

by , 18 July 2014
You probably know about donations tax. The tax SARS makes you pay if you make a donation. Doesn't sound fair, does it? Your company gives something out of the goodness of your heart and you have to pay tax on it.

There's a reason for this though. You see, some companies try to dispose of their assets under the table through a 'donation' so they don't have to pay Capital Gains Tax.

But you can avoid this tax and get a donation tax deduction instead, you just have to donate to the right kind of company...

*********** Top rated product  ***************
Avoid 200% tax penalty
 
*****************************************
 

Here's what happens when you make a donation to a normal organisation

 
If you make a donation to an organisation that works for a profit, you have to pay donation tax equivalent to 20% of the value of the donation.  And that donation doesn't just have to be in cash. It could be:
 
- Home;
- Farms;
- Cars;
- Trademarks;
- Shares; and
- Anything, tangible or intangible, that has value.
 
So let's say you donate a laptop worth R10 000, you'll then pay R2 000 in donation tax.
 
But this is only is you donate to a profit based organisation. You can avoid donation tax if you donate to another type of company...
 

Donate money to Public Benefit Organisation (PBO) to get a tax deduction

 
If your want to get a donation tax deduction, only donate to PBOs. You must also ensure the donation isn't more than 10% of your company's taxable income for the year.
 
If you keep to these rules, you can claim a tax deduction on the donation. It's a great way to get some tax back and improve your company's image.
 
*********** Hot off the press  ************
8 ways to LEGALLY beat the taxman
 
There are a few CGT loopholes that can save you thousands of rands every single year and, in some cases, let you off the CGT hook completely… 
 
*************************************


Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>