What is Section 18A?
Section 18A is a part of the South African Income Tax Act that encourages charitable giving by allowing taxpayers to claim a tax deduction for qualifying donations to certain approved organisations. This effectively reduces the donor’s taxable income, lowering the amount of tax they owe to the South African Revenue Service (SARS).
In simple terms:
Section 18A lets you deduct donations you make from your taxable income if they are made to a Section 18A-approved organisation, usually a Public Benefit Organisation (PBO) that has been formally approved by SARS.
This applies to both individuals and companies.
1. Donate to a Qualifying Organisation
To benefit from Section 18A:
The organisation you donate to must be registered with SARS and approved under Section 18A.
This is usually a PBO conducting qualifying public benefit activities (e.g., welfare, education, health, environmental conservation).
2. Get a Valid Section 18A Receipt
After donating, the organisation must issue you a Section 18A tax certificate/receipt.
This official document must include specific information (e.g., the PBO’s SARS reference number, donor details, donation amount or value).
Without this receipt, SARS will not allow the tax deduction.
3. Claim the Deduction on Your Tax Return
When you file your annual tax return (e.g., via eFiling), you declare the donation and upload/submit your Section 18A receipt.
The amount becomes a deduction against your taxable income for the year.