Donations Tax

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SOUTH AFRICA

DONATIONS TAX AND ASSOCIATED REGULATIONS

 

A “Donation” is the gratuitous disposal of a property in this case, without expecting something in return.

Donations tax applies to any individual, company or trust that is a resident as defined in section 1 of the Income Tax Act, 1962.

 

INDIVIDUALS

Donations by individuals: the first R100 000 of any bona fide donation will be free of donations tax. It should be noted that this amount is the maximum allowed (in totality) per year of assessment.

In other words, any tax free donations made by the donor, to individuals or otherwise, are capped at a TOTAL of R100 000 per year

A record of all donations, whether taxable or not, should be submitted on Form IT144.

 

A donation will be exempt if the total value of donations for a year of assessment does not exceed:

  • Casual gifts by companies and trusts: R10 000.
  • Donations by individuals: R100 000 (2008 to 2013 years of assessment) (section 56(2) (a) and (b)).

 

Amounts that exceed R100 000 for individuals are liable for 20% Donations Tax:

For amounts greater than R100 000 the person making the donation (donor) is liable for the tax but if the donor fails to pay the tax within the set period, the donor and donee are jointly and severally liable for the tax (section 59).

After making a donation you should fill in Form IT144 (Declaration by donor/donee) and send it to SARS with your payment.

Donations tax must be paid by the end of the month following the month during which the donation takes effect or such longer period as SARS may allow (section 60(1)). Payment must be accompanied by Form IT144 (section 60(4)).

IT144: http://www.sars.gov.za/AllDocs/OpsDocs/SARSForms/IT144%20%20Declaration%20by%20Donor%20-%20External%20Form.pdf

REFERENCES

  1. http://www.cover.co.za/general/donations-tax
  2. https://www.saica.co.za/integritax/2014/2325._Donations.htm
  3. https://en.wikipedia.org/wiki/Law_of_persons_in_South_Africa#Natural_and_juristic_persons

UNITED STATES

In general, contributions to charitable organizations may be deducted up to 50 percent of adjusted gross income computed without regard to net operating loss carrybacks. See more HERE.

REFERENCES

  1. Tax Information for Contributors
  2. Eight Tips for Deducting Charitable Contributions
  3. Organizations Eligible to Receive Tax-Deductible Charitable Contributions
  4. Filing Requirements and Required Disclosures