This additional reporting obligation comes as SARS continues to shift toward third-party data reporting, encompassing entities like banks, medical aid schemes and employers. Now too, section 18A-approved PBOs are among the entities mandated to provide third-party data via IT3(d) returns to SARS. In instances where section 18A-approved PBOs issue donation certificates for donations made in favour of them by donors between 1 March 2023 and 29 February 2024, these PBOs are required to submit all donor and donation details (form/value etc.) in the form prescribed by SARS on a bi-annual basis.
Section 18A-approved PBOs are required to register for Third Party Data Submission via e-Filing.
Various micro-learning videos, resources and guidance documents are available to assist in facilitating PBOs registration for and submission of the IT3(d)s (a helpful micro-learning video published by SARS is available
HERE).
From 1 March 2023, all section 18A certificates are required to reflect the following information (which information is also used by the PBOs when completing their IT3(d) returns):
- The name, reference number, address and contact details of the PBO;
- Details of the donation (date of receipt, amount and nature of donation – if not made in cash);
- Where the donor is a natural person: full name, identity number, physical address, email address, telephone number and income tax number;
- Where the donor is a juristic person: the type of entity, trading name (where relevant), the full name of the entity, registration number, registered address, contact person’s email address and income tax number; and
- Confirmation that the donation will be used exclusively for the object of the PBO.
PBOs that did not issue any section 18A certificates between 1 March 2023 – 29 February 2024 are still required to submit Rnil value declarations to SARS to confirm that the PBO did not receive any donations during the year of assessment. Any non-compliance with SARS by the PBO may jeopardise its ability to issue 18A certifications and/or its tax-exempt status. Accordingly, SARS compliance is integral to a PBOs tax status, carrying serious repercussions for their continued operations should the PBO become non-compliant.
The ultimate objective is that when donors’ submit their respective tax returns, the relevant sections pertaining to section 18A donations will be pre-populated, based on the data provided by the recipient PBOs. Additionally, the likelihood of an audit or request for supporting documentation from donors will significantly diminish, as the E-filing system will be able to independently verify the validity and accuracy of tax deductions claimed.
Section 18A-approved PBOs should move quickly to register with SARS to enable it to issue IT3(d) certificates and verify that they possess the requisite donor information and reporting capabilities to meet the third-party reporting obligations by 31 May 2024.
Should you require assistance with the tax status of your PBO registration to ensure compliance with the new reporting obligation or require any assistance in this regard, please reach out to your local Moore firm
here.