SARS: BGR 70 issued re Section 18A re multiple donations

SARS: BGR 70 issued re Section 18A re multiple donations

• 30 May 2024
• SARS Issues
• South African Accounting Academy

The issuing of a separate section 18A receipt for each bona fide donation actually paid or transferred may create administrative challenges for section 18A-approved organisations – as per Section 18A(1) and (2)(a) of the Income Tax Act.

The purpose of this BGR is to provide clarity on whether a section 18A-approved organisation is entitled to issue a single section 18A receipt for multiple bona fide donations actually paid or transferred by the same donor taxpayer during a year of assessment.

Ruling: Applying a businesslike interpretation and application to section 18A, a single section 18A receipt, complying with the mandatory information listed in section 18A(2)(a) issued to a donor taxpayer for the sum of bona fide donations actually paid or transferred by that donor taxpayer to a section 18A-approved organisation during a year of assessment, is acceptable. The sum of the multiple bona fide donations reflected in separate section 18A receipts must be the same amount as the sum of bona fide donations reflected in a single section 18A receipt.

The single section 18A receipt issued by a section 18A-approved organisation to a donor taxpayer, however, must contain the mandatory information and a breakdown listing the following information of each bona fide donation making up the sum of the multiple bona fide donations actually paid or transferred by that donor taxpayer during the year of assessment:

• The date of receipt of each bona fide donation
• The amount of each bona fide donation if the donation was made in cash
• The nature and value of each bona fide donation if the donation is a non-cash donation

The above will ensure substantial compliance with the requirements under section 18A.

Click here to download the BGR 70:

https://www.sars.gov.za/wp-content/uploads/Legal/Rulings/BGR/Legal-IntR-R-BGR-70-Issue-of-a-Single-Section-18A-Receipt-to-a-Donor-Taxpayer-for-Multiple-Bona-Fide-Donations.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Income Tax Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• Tax practitioners play a critical role in bridging the gap between taxpayers and SARS. As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies and tax practitioners to keep abreast of such changes in so that companies continue to meet their tax obligations, and remain aware of publications by SARS that provide clarity on some issues.

Relevance to Your Clients:

• An taxpayer (company or close corporation) has a duty to comply with the Income Tax Act, and directors have to fulfil their duties accordingly, otherwise they could be held liable.
• As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies to continue to meet their tax obligations, and remain aware of publications by SARS that provide clarity on some issues.
• A tax exempt entity must ensure that they issue Section 18A receipts that comply with the Act.

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