Equipping Believers for Ministry Globally
At BTC we strive to provide the very best in terms of training for the pastorate and see ourselves as a world-class African Seminary that’s committed to equipping Believers for ministry globally. In order for us to achieve this, we invite you to consider partnering with us financially on a consistent basis.
Take a moment to view this video and read the details below pertaining to the SA Donations legislation.
Benefits of Donating to BTC
The following article written by the well-known Grant Thornton for SAICA (SA Institute of Chartered Accountants) state the following facts, info and benefits an individual or organisation would enjoy when donating to BTC.
The ever-famous quote from Mahatma Gandhi ‘You must be the change you wish to see in the world,’ is fairly apt for businesses these days. In fact, the quote hit home for many companies as the world see a sudden explosion of Corporate Social Responsibility (CSR) initiatives from companies who felt the need to ‘give back to society,’ as Bill Gates would put it.
Consumers and businesses alike are savvier than they used to be about CSR. They are doing their homework, learning what it means to be socially responsible, and assessing a brand’s commitment with a more educated eye. Social responsibility can be defined as an ethical or theory that an organisation or individual is obliged to act profitable to society at large. In other words, it is a duty every individual or organisation has to perform in order to maintain the balance between the economy and the ecosystem. Social responsibility means maintaining the equilibrium between the economy, in material sense and the welfare of the society and the environment. This can be passive, by avoiding engaging in socially harmful acts or this can be active, by performing activities that directly advances public or social goals. In addition to the sense of wellbeing that comes from helping others, one would also qualify for a reduction in your tax bill. In recognition of the valuable role these donations from individuals and businesses play in these tougher economic times, government has legislated further concessions to allow greater tax relief in respect of such donations.
Qualifying Organisations: Whom can donations be made by?
- Government has recognised that qualifying section 18A organisations are dependent on the generosity of the public and to encourage that generosity has provided a tax deduction for certain donations made by taxpayers.
- A taxpayer, which includes an individual, trust or company/ close corporation, whom makes a bona fide donation in cash or of property in kind is entitled to a deduction from its taxable income provided the donation is actually paid or transferred during the year of assessment to the section 18A-approved organisation.
- A taxpayer may make a donation directly to a section 18A-approved organisation or through a payroll-giving programme operated by the taxpayer’s employer.
- Any claim for a tax deduction from taxable income of a taxpayer will be allowed only if supported by –
- a section 18A receipt issued by a section 18A-approved organisation; or
- an employees’ tax certificate (IRP 5) issued by an employer.
- The allowable deduction from the taxable income of a taxpayer that is a portfolio of a collective investment scheme is determined in accordance with a specific formula.
- BTC Southern Africa is an exempt association regarded with the South African Revenue services under section 18A of the Income Tax Act No. 58 of 1962 (the Act) and therefore your donations to our institute will allow you or your organisation the tax deduction.
What is a section 18A receipt?
- A section 18A receipt, also known as a tax-deductible receipt, is a specific receipt that is issued by a section 18A-approved organisation to a donor which entitles the donor to a deduction from the donor’s taxable income.
Tax consequences for donations made to a qualifying organisation?
- Taxpayers regarded as natural persons, trusts, companies, or close corporations can deduct from their taxable income, the amounts they donated to approved organisations, up to the value of 10 percent of their taxable income.
- The donation must actually be paid or transferred during the year of assessment in order to qualify for a tax deduction in such tax year.
Individuals whom wish to utilise the tax deduction against their PAYE?
- Payroll donations is one of the simplest and most effective ways for your company and employees to get involved in supporting meaningful causes.
- Your donation can also reduce your monthly employees’ tax, if your employer agrees to process your donation through its payroll administration or system.
- Any qualifying donation made is limited to 5% (five percent) of your salary and can be deducted from your salary before employee’s tax is calculated. However, further requirements also need be met:
- The beneficiary must be an approved organisation;
- The donation amount is deducted from your salary and paid to the approved organisation on your behalf;
- The approved organisation must issue the section 18A certificate to your employer;
- Your employer must reflect the full amount of the donation, not only the five percent, on your IRP5 certificate; and
- The IRP5 certificate will suffice as the supporting documentation required to claim the tax deduction on your annual tax return.
Donations other than cash
- Your donation can be in the form of cash or property in kind.
- If you donate property in kind and it qualifies for the section 18A deduction, the deemed donation amount will be dependent on whether the donation is in the form of trading stock, trading assets or other assets.
- If the donation is in the form of immovable property, which is of a capital nature, and the cost does not exceed the lower of the market value or municipal value, the deemed donation will be calculated according to a prescribed formula.
- Any property bequeathed to a registered section 18A entity, is excluded from the estate of the person and therefore not subject to estate duty.
- Transfer duty on property acquired where the whole or substantially the whole of the property will be used for the purpose of carrying on one or more approved Public Benefit Activities is further exempted.
- Finally, if you donate an asset to a tax exempt entity, you can disregard any capital gain or capital loss determined in respect of such donation.
Donation of a service
- The donation of a service such as time, skill or effort to a section 18A-approved organisation will not qualify as a deduction for purposes of section 18A since a service is not a donation of property made in kind.
I trust this information will help you to decide when next you’re looking at donating – there are many tax benefits when donating to BTC!
Contact us directly at firstname.lastname@example.org or email@example.com for assistance.