RECAP: 4 Donations that are completely tax-exempt?
As the general rule goes, you're liable for donations tax at a rate of 20% per donation.
As an individual (natural person) however, you can donate the first R100 000, tax-free, per year of assessment, while a company is allowed R10 000 per year of assessment, after which a 20% tax rate is applicable.
But did you know that certain donations are completely tax-exempt?
That's right! Here are 4 of them...
How much time do you spend looking for useful tax information? Do you need all the South African taxes analysed and explained in one easy location?
Now you can have all the information in one place: The Practical Tax Loose Leaf Service.
Over 500 pages compiled by our tax experts, comprising of:
• All the definitions and legal regulations, useful advice, exceptions to the rules that help you slip through the legislative jungle of taxes.
· Case studies and practical examples that show you what elements you should consider for your taxes to be perfect.
· Red flags you need to watch out for and the penalties you'll face if you don't respect them.
· Sample templates at your disposal, ready to be filled in, customised and printed.
You will also get free access to the accountingandtaxclub.co.za. Here you'll find questions and answers on any tax and accounting issues. You can also ask our experts a tax question
Get your copy of the Practical Tax Loose Leaf Service now.
Donations that are cancelled within 6 months of the donation's effective date will not apply for tax.
For example, a company wishes to donate an amount to a charity organisation which it later finds is a scam. They can cancel the amount without having to pay donations tax. And if they already have paid donations tax, they can claim it back.
Donations made in contemplation of death will not apply for donations tax.
For example, a gravely-ill lady, who's on her last breaths while lying in hospital, states that she wants her car to go to a charity focussing on cancer patients.
Donations where the passing of a benefit is suspended until the death of the donor are tax-exempt.
For example, an old couple, who own a farm, tell a local animal shelter (for abused farm animals) that when they've both passed on, they can have it.
Donations to recreational clubs are tax-exempt.
For example, you could be a t-shirt manufacturer who donates a whole lot of them to your local tennis club.
*Those were 4 donations that are completely tax-exempt.
To learn of many other donations that are exempt from the 20% donation-tax rate, simply page over to D 03: Donations Tax
in your Practical Tax Loose Leaf Service
If you don't have it already, click here.
Note: 5 of 1 vote