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Include these six details on your donation receipts to get your cash back from SARS

by , 25 January 2013
There are grumbles across the world that tax goodwill writeoffs for donations are either inconsistent, based on doubtful theory or not properly explained. Luckily, the rules about getting cash back for making a donation or goodwill writeoff are clearer in South Africa. You just need to include six important details on your donation receipt for SARS to process your claim.

A European regulator has complained that goodwill writeoffs are inadequate as they're inconsistent and the rules make no sense.

They 'rely on traditional cost-based record keeping, doubtful financial theory and blind trust in markets', Edward Hadas writes on the BreakingViews website.

And there's no unified or single source of guidance on how to treat donations or goodwill write offs in Indian GAAP (Generally Accepted Accounting Principles), according to Ashish Gupta and Saurabh Mathur  on The Hindu Business line website.

SARS makes it easy to get cash back for making a donation or goodwill write off.

You can claim a tax deduction on any donation you've made, in cash or in kind, of up to 10% of your taxable income, according to The Tax Matters newsletter.

But there are the six details you must include on any donation receipt, to claim the deduction in your next business tax return.

Make sure the institution you're donating to issues you a receipt with the following six details

  1. SARS reference number of the public benefit organisation, institution or board (PBO);
  2. Date of the receipt of the donation;
  3. Name of the PBO;
  4. Name and address of donor;
  5. Amount of the donation or nature of the donation (if not in cash); and
  6. A certificate that the receipt is issued for the purposes of Section 18A.

It's as easy as that. Make a donation to help others, submit the receipt when you make the claim on your tax return and your pocket will benefit when SARS refunds you!

For a detailed explanation on donations tax, get your hands on our FSP Business Practical Tax Loose Leaf . In the Practical Tax Loose Leaf we've got a dedicated chapter on donations tax...in it you'll discover:
  • How to reduce your estate duty liability by R40 000 D 03/006
  • Donations tax – will you be taxed? D 03/002
  • When should you pay your donations tax? D 03/004
  • Which donations are exempt from tax? D 03/004
Get your copy of the Practical Tax Loose Leaf  today!


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