Donation Management

Why are Section 18a Tax Certificates important?

Section 18A certificates are important for nonprofits because they provide evidence that the organization is eligible for certain tax deductions and benefits. In South Africa, section 18A of the Income Tax Act allows individuals and companies to claim tax deductions for donations made to certain nonprofit organizations. In order to claim these deductions, donors must have a section 18A certificate from the nonprofit organization. This certificate serves as proof that the organization is eligible to receive tax-deductible donations and provides donors with the information they need to claim the deductions on their tax returns. By obtaining a section 18A certificate, nonprofits can make it easier for donors to support their work, and can potentially attract more donations and support for their programs and activities.

In order to obtain a section 18A certificate in South Africa, an organization must be a registered Public Benefit Organization (PBO). This is because section 18A tax deductions are only available for donations made to PBOs, which are nonprofit organizations that are registered with the South African Revenue Service (SARS) and have been approved to receive tax-deductible donations. To register as a PBO, an organization must meet certain criteria and must submit an application to SARS. Once the organization is registered, it can apply for a section 18A certificate, which will allow it to receive tax-deductible donations and provide donors with the necessary documentation to claim the deductions. Overall, being a registered PBO is an important requirement for obtaining a section 18A certificate and for benefiting from the associated tax deductions.

Unified Donors and Beneficiaries

Generating Tax Certificates

To issue tax certificates for donations received, you can follow these steps:

  • Register as a Public Benefit Organization (PBO) with the South African Revenue Service (SARS) and obtain a section 18A certificate.
  • Import donation information into the system, such as by importing bank statements, data from your accounting software, or a spreadsheet.
  • Use templates to design the tax certificates and covering letters.
  • Issue tax certificates to donors, either for all donations received during the year or for individual donations as needed.
  • Send the tax certificates to the donors and have the option to print them if necessary.
  • Use the system's tracking and reporting capabilities to manage and review the tax certificates you have issued.
  • Provide the tax certificates and supporting documentation to your auditors as needed.

You can send a test certificate to yourself or directly to the donor, and have the option to print the certificate if needed. If you need to cancel a certificate, you can do so by entering a reason and the system will keep track of it. We help setup a pre-designed certificate template that you can use, and can offer good certificate reporting and tracking capabilities to help you and your auditors keep track of the certificates you have issued.